Since the new year has begun, have you started getting ready for tax time? Did you get your Tax Deductible Receipt Envelopes or Folders prepared? Now is the time to start getting things together. April 15th will be here before you know it and the sooner you start collecting your tax data, the less stressed out you will be.
Now that you have your envelopes or folders together you may ask, "Now what?" "What kind of documentation should I have for deductible expenses?" Well, Let's take a look at donations. For single donations acceptable documentation is a receipt, cancelled check, or a written record of your donation for donations under $250. If the donation exceeds $250, then you must have a written statement for the organization you made the donation to.
On the other hand for other expenses, acceptable documentation would include sales slips, paid bills, invoices, receipts, deposit slips, and cancelled checks. Additional documentation is required for non-reimbursed employee business expenses for travel, entertainment, gifts, and the use of a car. In circumsatnces such as that, you should keep records that prove the time, place, business purpose, and business relationship related to the those types of expenses.
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