IRS Deudctions
 
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Recordkeeping

If you deduct travel, entertainment, business gift, or local transportation expenses, you are required to keep records that substantiate certain elements of each type of deduction.

These elements include:

  • the amount spent,
  • the dates the expenses were incurred and
  • the business purpose of the expenditure

You should keep written records. These can be in the form of an account book, diary, statement of expense, or similar record. Generally, you should also keep the bills, receipts, and cancelled checks that support your expenditures.

If you are audited and cannot substantiate your expenses, your deduction will be disallowed.

 
Recordkeeping needed to prove certain business expenses

Below is a table showing how to prove certain business expenses. See IRS publication 552, Recordkeeping for Individuals.

 
Travel

 

Amount

Cost of each separate expense for travel, lodging, and meals. Incidental expenses may be totaled in reasonable categories such as taxis, daily meals for traveler, etc.

Time

Dates you left and returned for each trip and number of days spent on business

Place or Description

Destination or area of your travel (name of city, town, or other designation)

Business purpose and business relationship

Purpose: Business purpose for the expense or the business benefit gained or expected to be gained.

Relationship: NA



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