Paper Receipts or Scanned Copies: What a Midvale Small Business Can Keep

Can a Midvale business keep scanned receipts instead of paper?

Yes, as long as the scan can stand in for the paper. IRS Publication 583, revised December 2024, says all requirements that apply to hard copy books and records also apply to electronic storage systems, and it counts electronic imaging, which is what a scan is, as one of those systems.

So the question isn't paper or digital. It's whether your copy would do the original's job. The IRS and Midvale City pages cited here were checked in November 2026.

The short version: scanning is allowed, but it moves the work from storing paper to checking scans.

What does the IRS expect from a scanned receipt?

It has to be readable, findable and complete. Revenue Procedure 97-22, the IRS's 1997 guidance on electronic storage that Publication 583 still points to, says stored records must be legible and readable on a screen and when printed, so that every letter and number can be identified.

It also asks for an indexing system, and says that requirement is met by something that works like a reasonable paper filing system. For a small business that can be one folder per month, with each file named by date, vendor and amount.

What the receipt has to show doesn't change with the format. The IRS page on what records to keep says documents for an expense should identify the payee, the amount paid, proof of payment, the date and a description showing it was a business expense. A scan that crops off the date or the total leaves part of that out.

When can you throw the paper away?

Once your scanning routine has been tested, and not before. Section 7 of Revenue Procedure 97-22 allows the original paper to be destroyed after the taxpayer has done its own testing showing records are being reproduced in compliance with the procedure, and has put procedures in place to keep it that way. A simple version of that test for a small business:

1. Scan a month of receipts, then open a few at random and check the date, vendor and total.
2. Print one or two and make sure the printed copy reads as clearly as the screen.
3. Pick an entry in your books and confirm you can find its scan, then work back the other way.
4. Keep the paper for any receipt that won't scan cleanly, such as a faded one.
5. Write down how you scan, name and store files, since the procedure says the IRS can ask for a description of the system.
6. Keep a backup copy somewhere other than the computer that holds the originals, and set the folder up so files can't be changed or deleted by accident.

Publication 583 adds that the IRS may test an electronic storage system, that the test isn't treated as an examination, and that a system falling short can bring penalties unless the original paper is still kept so the correct tax can be worked out.

How long should a Midvale business keep receipts, paper or scanned?

The same length of time either way, because it follows the return the receipt supports, not the format. The IRS page on how long to keep records says to keep records that support an item of income or deduction until the period of limitations for that return runs out.

The IRS page says the clock generally runs from when you filed, and a return filed early is treated as filed on its due date. Records for equipment and other property run until the period ends for the year you sell or dispose of it, and a lender or insurer may want records longer than the IRS does.

What does Midvale add to the year-end file?

Your business license record. The city's business license renewal page says most Midvale City licenses expire on December 31, the fee is past due after January 15, and renewal can be paid online through Xpress Bill Pay or by mail with the renewal form the city sends.

The page also notes that your business account number is on your current license, so scan the license too. Then file the renewal payment record in the monthly folder beside the entry it matches.

Working from home? The city's licensing FAQ says Midvale requires most home businesses to hold a license, though some may be exempt under Utah Code 10-1-203. With a license or an exemption, the receipts follow the same IRS rules as a storefront's.

Which should you choose?

Go mostly digital if your spending runs through one business account and you'll name files every week. Keep the paper too if a receipt is faded, if your scans aren't tested yet, or if you couldn't say where last March's receipts are. If they're months behind, the catch-up bookkeeping guide covers getting the missing months back in order, and the weekly receipt habit for trades owners works just as well for a Midvale business.

Getting the books off your plate

Inkdrop Bookkeeping is based in West Jordan, in the same county as Midvale, and is available to owners anywhere in Utah by phone and email. Its services include monthly bookkeeping, catch-up bookkeeping and bank and credit card reconciliation. The Midvale bookkeeping page has more on the city's license steps and renewal dates.

Questions about what you can deduct belong with your tax professional. For the books, call (801) 448-3672 or use the contact page to set up a free call with Cara, and Inkdrop quotes once it's clear how many accounts and transactions are involved.