Updated November 6, 2026. Quick answer: The $75 figure is a travel, gift and listed-property rule, not a general receipt threshold. For those items the regulation requires documentary evidence for lodging and for any other expenditure of $75 or more, with a narrow exception for transportation charges that are not readily documented. Every other business expense falls under the general recordkeeping rule, which names no dollar floor, so keep a receipt or an equivalent record for all of them.
On records for a one-person business: client gifts and the $25 limit, a free digital receipt folder method and rebuilding a lost receipt.
On records for a one-person business: what to record for a business meal and the 50% limit, the $2,500 de minimis safe harbor and the election statement and how the per diem works for self-employed meals.
What the $75 rule says
This page reads the primary sources linked under Sources, as retrieved on November 6, 2026. Publication 463 is the 2025 edition. Publication 583 is the December 2024 revision.
The rule sits in Treasury Regulation 1.274-5(c)(2)(iii). It requires documentary evidence, meaning receipts, paid bills or similar evidence sufficient to support the expenditure, for two things: “Any expenditure for lodging while traveling away from home”, and “Any other expenditure of $75 or more except, for transportation charges, documentary evidence will not be required if not readily available.”
Publication 463 turns the same rule around. Documentary evidence is not needed when “Your expense, other than lodging, is less than $75.” Two details are easy to miss. Lodging is the exception to the exception, so a hotel bill needs a receipt at any price. And the $75 test changes whether a receipt is required, not whether the expense must be recorded: the rest of the record (amount, time, place, business purpose) is still required below $75.
Which expenses the $75 rule reaches
The rule belongs to Internal Revenue Code section 274(d), which says that no deduction or credit is allowed “under section 162 or 212 for any traveling expense (including meals and lodging while away from home), (2) for any expense for gifts, or (3) with respect to any listed property (as defined in section 280F(d)(4)), unless the taxpayer substantiates by adequate records or by sufficient evidence corroborating the taxpayer’s own statement (A) the amount of such expense or other item, (B) the time and place of the travel or the date and description of the gift, (C) the business purpose of the expense or other item, and (D) the business relationship to the taxpayer of the person receiving the benefit.”
In practice that means travel, gifts and listed property. Publication 463 organizes its proof table the same way, with rows for travel, gifts and transportation, and for car expenses it asks for “the mileage for each business use, and the total miles for the year”.
Ordinary expenses: the general rule has no dollar floor
Software, supplies, professional fees, a phone plan and similar costs are not section 274(d) items, so the $75 rule does not govern them. The governing rule is section 6001 and its regulation, which require a person to keep “such permanent books of account or records, including inventories, as are sufficient to establish the amount of gross income, deductions, credits, or other matters required to be shown by such person in any return of such tax or information”.
The IRS explains what supports an expense entry: “Your supporting documents should identify the payee, the amount paid, proof of payment, the date incurred, and include a description of the item purchased or service received that shows the amount was for a business expense.” Neither passage names a dollar amount. A small software charge and a large one are held to the same standard, which is why the practical rule for a one-person business is to keep a receipt, invoice or equivalent for everything you deduct. How long to keep them is covered on Bookkeeping for a One-Person Business.
Can you estimate? The Cohan rule, and where it stops
In 1930 a federal appeals court heard from a taxpayer who produced plays, spent heavily on travel and entertaining, and kept no account. It held that “the Board should make as close an approximation as it can, bearing heavily if it chooses upon the taxpayer whose inexactitude is of his own making”. That is the Cohan rule: where an expense was clearly incurred but the exact amount cannot be proven, a court may approximate it rather than disallow it entirely.
For the section 274(d) items, the regulation closes the door. It says that “This limitation supersedes the doctrine found in Cohan v. Commissioner, 39 F. 2d 540 (2d Cir. 1930).” and that “no deduction or credit shall be allowed a taxpayer on the basis of such approximations or unsupported testimony of the taxpayer”. Publication 463 puts it in one line for the same categories: “You can’t deduct amounts that you approximate or estimate.” Cohan is a court doctrine, not a recordkeeping method, and for travel, gifts and listed property the regulation says it no longer applies.
What a card statement proves, and what it does not
Publication 583 says that when you have no canceled check you may prove payment with a financial-institution statement, and for a credit card the statement must show “Amount charged.”, “Payee’s name.” and “Transaction date.” It then adds a warning: “Proof of payment of an amount, by itself, does not establish you are entitled to a tax deduction.” It tells you to keep “credit card sales slips and invoices, to show that you also incurred the cost”.
The regulation sets the standard for a receipt itself: “documentary evidence will be considered adequate to support an expenditure if it includes sufficient information to establish the amount, date, place, and the essential character of the expenditure.” A statement line with a payee and an amount does not show the essential character of the purchase or its business purpose. The same logic applies to checks: “a cancelled check drawn payable to a named payee would not by itself support a business expenditure without other evidence showing that the check was used for a certain business purpose.”
Receipt or record? By type of expense
| Expense | What the sources require | Where it is stated |
|---|---|---|
| Hotel or other lodging while traveling away from home | Receipt required at any price | Regulation 1.274-5(c)(2)(iii)(A)(1); Publication 463, chapter 5 |
| Another travel expense of $75 or more (a meal, for example) | Receipt or similar documentary evidence, plus the amount, time, place and business purpose; for transportation charges only, a receipt is not required if not readily available | Regulation 1.274-5(c)(2)(iii)(A)(2); Publication 463, Table 5-1 |
| Another travel expense, under $75 | No receipt required by the rule, but the written record of amount, time, place and purpose is | Publication 463, chapter 5 |
| A gift | Record of cost, date, description, business purpose and relationship; documentary evidence follows the same $75 test | Section 274(d); Publication 463, Table 5-1 |
| Car use | Mileage for each business use and total miles for the year, with the date and purpose of each trip | Publication 463, Table 5-1 |
| Software, supplies, professional fees and other ordinary expenses | A supporting document identifying payee, amount, proof of payment, date and a description; no dollar floor | Section 6001; IRS, What kind of records should I keep |
What this means for a one-person business
Use the $75 line only to understand why a hotel receipt is non-negotiable and a small parking receipt on a trip is not required by the rule. For everything else, the safe working rule is a single habit: keep a receipt, invoice or equivalent for every expense you deduct, write the business purpose down when you pay, and keep the file in one place. Record the purpose at the time, because “A timely kept record has more value than a statement prepared later when there is generally a lack of accurate recall.” The line-by-line mechanics for trips and meals are on Schedule C lines 24a and 24b.
Software is optional. A phone camera, a dated folder and a spreadsheet meet the standard described above; an app is worth considering only if it replaces a specific manual job. The links below are options with an affiliate relationship, and the free baseline remains a real alternative.
Common mistakes
- Throwing away receipts under $75. The $75 test is a rule for section 274(d) items, and below it the written record is still required. Ordinary expenses have no such floor.
- Treating the card statement as the receipt. Publication 583 says proof of payment alone does not establish a deduction.
- Estimating a travel, gift or car expense. For those items Publication 463 says amounts you approximate or estimate cannot be deducted.
- Writing the business purpose months later. A record made at or near the time carries more weight than one rebuilt from memory.
Related: Bookkeeping for a One-Person Business, IRS Publication 463, and Can you throw away paper receipts? IRS rules for scans.
Sources
- Treas. Reg. 1.274-5, Substantiation requirements (Cornell LII, eCFR text)
- Treas. Reg. 1.274-5T, Substantiation requirements (temporary) (Cornell LII, eCFR text)
- 26 U.S.C. 274, Disallowance of certain entertainment, etc., expenses (Cornell LII)
- 26 U.S.C. 6001, Notice or regulations requiring records, statements, and special returns (Cornell LII)
- Treas. Reg. 1.6001-1, Records (Cornell LII, eCFR text)
- IRS Publication 463 (2025), Travel, Gift, and Car Expenses
- IRS Publication 583 (Rev. December 2024), Starting a Business and Keeping Records
- IRS, What kind of records should I keep
- Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930) (Harvard Caselaw Access Project text)
Read from the IRS documents linked above on November 6, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.