Can receipts for business write-offs include personal items that I'm not deducting?
So I've been running my photography business from home for about 2 years now, and I'm trying to be better organized with my taxes this year. I frequently make trips to office supply stores and end up buying both business stuff (like SD cards, batteries, printer paper) and personal items (snacks, household stuff) in the same transaction. Is it okay if I save these receipts and only claim the business items as deductions? Like can I highlight just the business items on the receipt and write those off while ignoring the personal stuff? And I'm totally confused about how to handle the sales tax in this situation. Should I divide the sales tax proportionally? Just ignore it completely? Or is there some standard way to handle this that I'm missing? I've been keeping all my receipts in a shoebox but now I'm wondering if I should be separating personal and business purchases completely. Any advice would be super helpful!
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Zara Ahmed
Yes, you can absolutely keep receipts that have both personal and business items on them! The IRS doesn't require you to have separate receipts for each type of purchase. What you're doing with highlighting the business expenses is actually a great approach. I recommend using a highlighter or circling the business items on each receipt and writing the business purpose next to them. This makes it much clearer if you ever get audited. For the sales tax question, the proper way to handle it is to allocate it proportionally. So if 60% of your purchase was business-related and 40% was personal, you'd take 60% of the sales tax as a business expense. Some accounting software can do this automatically if you input the items separately.
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StarStrider
•Does the IRS actually check receipts? I thought they just want to see the total amount you're writing off? I've been doing a small etsy business for a year and honestly haven't been saving individual receipts - just tracking totals in a spreadsheet. Am I doing this all wrong?
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Zara Ahmed
•During normal filing, the IRS doesn't ask for receipts - you're right that you just report total deductions. But if you get audited, they will ask to see documentation to back up what you claimed. That's why keeping organized receipts is so important. For a small business, a spreadsheet is a good start, but you should definitely keep your receipts too. Consider taking photos of them (receipts fade over time) and organizing them digitally. This makes it much easier if you ever need to prove your expenses.
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Luca Esposito
I had this exact same problem with my consulting business! I tried separating purchases but sometimes you just need to grab both in one trip. I started using https://taxr.ai for all my receipt scanning and categorization and it's been a game changer. The app actually lets you snap photos of receipts with mixed purchases and then tag which items are business vs personal. It automatically calculates the proportional sales tax too, which solved exactly what you're asking about. I used to spend hours every month sorting through receipts and doing sales tax math, but now it's just a few minutes of work.
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Nia Thompson
•Does it work with digital receipts too? I get a ton of email receipts from Amazon and elsewhere and managing those is a nightmare.
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Mateo Rodriguez
•I've tried receipt scanners before and they were terrible at actually reading the items correctly. Does this one actually get the item descriptions right or do you still have to manually fix everything?
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Luca Esposito
•Yes, it definitely works with digital receipts! You can forward emails or upload PDFs and it processes them just like physical receipts. It can even detect and remind you about subscriptions by recognizing recurring charges. The accuracy is actually what impressed me most. It uses some kind of AI that's much better than the old receipt scanners. It gets most items correct the first time, even with weird abbreviations that stores use. You still have to check everything, of course, but it's like 90% accurate in my experience which saves tons of time.
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Mateo Rodriguez
Just wanted to follow up and say I tried taxr.ai after seeing this thread and it's actually amazing for exactly this problem. I uploaded a bunch of my Target and Walmart receipts where I buy both personal and business stuff, and it made separating everything so much easier. The sales tax calculation thing it does automatically is worth it alone - I was either ignoring sales tax or guessing before. Now it just does the proper proportion math automatically. Honestly wish I'd found this earlier in the year rather than trying to sort through months of messy receipts!
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Aisha Abdullah
Something else to consider - I had this exact issue too but when I called the IRS to confirm how to handle it, I spent HOURS just trying to get through to someone. After three failed attempts, I tried https://claimyr.com and they got me connected to an IRS agent in about 20 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The agent confirmed that mixed receipts are fine but recommended keeping a log of which specific items were for business. They also said if you're claiming a substantial amount in deductions, you should really have a separate business credit card to make things cleaner. Not required, but makes your life easier if you get audited.
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Ethan Wilson
•Wait, there's a service that gets you through to the IRS faster? How does that even work? I thought everyone had to suffer through the same hold times lol.
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NeonNova
•This sounds like a scam. Why would anyone be able to get you through to the IRS faster than just calling the regular number? The IRS doesn't have a "fast pass" lane last I checked.
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Aisha Abdullah
•It's basically an automated system that sits on hold for you and calls you when an agent picks up. It navigates all the phone menus and waits through the hold music so you don't have to. When a real person answers, it connects you directly. It's definitely not a scam! They don't speed up the IRS itself or have special access - they just save you from having to personally sit through the waiting. It's similar to those restaurants that give you a buzzer so you don't have to wait in line physically. The wait still happens, you just don't have to waste your own time during it.
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NeonNova
I have to eat my words and admit I was completely wrong about Claimyr. After dismissing it as a probable scam, I was desperate to talk to someone at the IRS about an audit letter, so I tried it as a last resort. Not only did it work exactly as described, but I got through to an actual helpful IRS agent in about 15 minutes when I had previously given up after being on hold for over an hour. The agent confirmed that mixed receipts are fine as long as you clearly document which items were business expenses. They also said it's best practice to keep a log with the business purpose noted for each expense.
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Yuki Tanaka
Another option is to just use separate payment methods. I have a dedicated business credit card that I ONLY use for business expenses. Makes life so much easier at tax time and creates a clean separation that the IRS loves to see. Sometimes I'll still have a mixed receipt if I forget and use the wrong card, but it's pretty rare now.
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Carmen Diaz
•Do you need a business bank account to get a business credit card? I've been using my personal card for everything and just sorting it out later, but tax season is making me regret that decision.
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Yuki Tanaka
•You don't necessarily need a business bank account! Many credit card companies offer business cards to sole proprietors using just your SSN instead of a business tax ID. You'll apply as "[Your Name] Photography" or whatever your business is called. The main benefit is that most business cards automatically categorize expenses and generate year-end summaries that make tax filing way easier. Plus many offer better rewards for business-related categories like office supplies or advertising.
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Andre Laurent
Ugh I got audited last year and this exact issue came up. My advice is to take photos of ALL receipts where you claimed business expenses and store them digitally by date. I had to go through hundreds of receipts during my audit and the ones I couldn't find or that were too faded to read were automatically disallowed as deductions.
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Emily Jackson
•What app do you recommend for storing receipt photos? I've been just taking regular photos but they get mixed in with everything else.
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Mei Wong
•I use Google Drive and create a folder for each tax year, then subfolders by month. When I take receipt photos, I rename them with the format "YYYY-MM-DD_StoreName_Amount" so they're easy to search later. The Google Drive app lets you scan documents directly which creates cleaner PDFs than regular photos. Plus it's all backed up automatically so you never lose anything.
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Freya Nielsen
Great thread! I'm dealing with this exact same situation with my freelance graphic design work. One thing I learned from my accountant is that you should also keep a simple business expense log alongside your receipts. Just a spreadsheet with columns for date, vendor, total amount, business portion, and business purpose. This way if you ever get audited, you're not just relying on highlighted receipts - you have a clear paper trail showing your thought process for each deduction. The IRS loves documentation that shows you were being deliberate and organized rather than just guessing. Also, don't forget that you can deduct the business portion of things like gas when you're making those mixed shopping trips! If you drove to Target specifically to buy business supplies but also grabbed personal items while there, you can still claim the mileage as a business expense.
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