“Would you like a receipt?” We hear this question so often in daily life, we almost just tune it out with an automatic “No thanks.” But, keeping track of your receipts is actually very important, especially for small business owners and entrepreneurs. This is because if your tax returns are audited they need to be able to meet the strict substantiation requirements of the IRS.

Mark J. Kohler, author of The Business Owner’s Guide to Financial Freedom, notes “It’s true that you could argue what’s called “the Cohen Rule,” that you can use “other credible evidence,” or rely on IRS Publication 463 which says that you don’t need to keep receipts for expenses under $75, but why get into a fight? Arguing with the IRS can cost you a lot more time a...