Audit Expectations Of Business Expenses
(Directly from the IRS)

1. Accounting records detailing the expenses deducted.

2. Canceled checks and receipts to verify the expenses claimed (These records should be organized into the same categories as shown on your Schedule C or F).

3. Copies of any payroll tax returns, information documents (such as Forms 1099 and W-2) filed for the tax year.

4. Invoices for all capital acquisitions during the year.

5. Be prepared to discuss the business relationship for all expenses.

6. For Car & Truck Expenses: (a) A log detailing total mileage and business mileage & (b) Business relationship of trips with names of clients and reasons for the trips

7. Travel should be broken down on a per trip basis to include all receipts and canceled checks and a log outlining the business relationship of the trip. If it was a conference, we need to see the itinerary of meetings and/or classes attended.

8. Meals: Outline business relationship with clients' names and business discussed.

9. Gifts: Number of persons to whom gifts given and business relationship.

10. Office in Home: A floor plan and percent of income made in office in home.

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