Most people often ignore or swiftly say no in the request for a receipt, although not small business owners. The reason maybe they devote hours upon hours establishing them during looking forward into turning them into their bookkeeper. Top business owners simply know how to keep receipts to prevent their tax return from peril. Its real receipt is audit protection hence take them seriously. Know how?
You don’t have to loss to the internal revenue service for not keeping your receipt. You may deduct thousands of dollars for meals, travel, automobile, phone expenses among others and if you miss any of receipt you will end up losing to IRS- it’s a substantiation requirement to keep your receipt for the tax returns. They are part of the proper registers and lose in audits and court case.
You are entitled to the deduction, not following the rules you will automatically be left out in the cold. Check on this tax return tips keeping your receipts.
Keep all your receipts
It’s one of the points that can’t be overstated. One of my clients during an audit recently with an IRS agent we astonished that the agent needed every receipt to support the clients travel expenses all year round. Most people will argue with the COHEN RULE that it’s easy to show other credible evidence but IRA only allows you not to keep a receipt for expenses under $75 hence keep everything else and reduce the time taken for your audit.
Take notes ion receipts with their business purpose
One of my great ideas for dining and entertainment expenses; it could be easy to remember when you bought that fax machine but hard to remember who you went dinner with a few months ago which will impact on your tax return.
Scan the receipt keep them at least for six year
IRS has been seen asking for documentation and audit six years back in some cases. The ink on your receipt will have faded by then but keeping then on you PC will solve the issue. IRS allows the taxpayers to keep their scan receipt and store them electronically while still keeping the original receipt in case the hard disc crashes.
You can still take a picture of the receipt while still using the iPhone and android apps that can help you better track your expenses for tax return benefits.
Why don’t you keep a journal?
Keep a daily journal for your business even if you are totally busy. It’s easy if you keep a good calendar in your outlook or Google calendar. A client if mine was able to substantiate various deductions he claimed using an outlook calendar printout. Make use of the many good legal and other reasons keeping a detailed schedule of your day exist even if you add the details later in the day for your tax return.
Keep off cash and don’t rely on credit cards statement plus canceled checks
They will save at times but insufficient without receipts. The IRS will see you spent a sum of $450 but they need to know what you bought. Using cash in your spending is death-nail my clients trying to have good bookkeeping records and documents for an audit. Stick to the credit and debit card where you can easily track you’re spending.
It’s no secret that audits will be coming and you may lose on your tax return but with good booking and receipt you will win it all; thanks to www.taxreturn247.com.au while you enjoy your tax refund.