Tax Preparation

• Tax preparers need both statements and receipts when filling out tax returns. While the IRS does not require receipts and statements to be submitting with tax returns, the IRS requires all paperwork in case there are any questions about an expense being claimed as a tax deduction.
  
  

Statements

• Statements are documents showing overviews of different kinds of accounts. For example, a monthly credit card statement provides an overall view of the monthly charges on the credit card. Bank statements show overall deposits and withdrawals for a given period. However, the statements do not provide in-depth breakdowns of the various transactions.
  
  

Receipts

• When it comes to proving tax deductions, receipts are extremely important. The IRS can request to see receipts to prove a tax deduction and if the individual cannot provide the receipt, the IRS will usually disqualify the deduction. Receipts are different from statements because receipts provide a breakdown of different charges. For example, while a credit card statement shows that an individual spent $100 at Office Depot, the actual receipt shows how the $100 in specific detail. If the individual spent $70 on soda and $30 on office supplies, the IRS might only allow the $30 to be claimed as a valid tax deduction.
  
  

Obtaining Copies

• There is no method preferred for storing and recording receipts and statements. In many cases, statements usually can be found through online sources. This is especially true for individuals who have decided to go "paperless." On the other hand, most receipts are not available online, unless they were online purchases. In order to get receipts from a brick-and-mortar store, it is sometimes necessary to go to the store in person.
  
  

Audits

• In most cases, receipts and statements can be held for three years before discarding them. However, since the IRS can audit up to six years prior if it suspects there has been gross problems with a tax return, some individuals keep their receipts and statements for six years.
  
  

Canceled Checks

• In addition to receipts and statements, canceled checks often are used to show proof of payment. A canceled check, in conjunction with a receipt, shows the amount of the actual tax deducted item, as well as provides proof of ownership.