RECEIPTS FOR BUSINESS EXPENSES

One of my clients just went through an audit of their unincorporated business expenses (schedule C). The IRS threw out all of the expenses since my client didn't keep receipts. We had check copies but that was not enough. To avoid this same dismal result, make sure you keep all receipts for business expenses for at least the last three years which are open under the statute of limitations. It is a good idea to staple the check voucher to the invoice or receipt and keep in a folder by year. If you don't use check vouchers write the date and number of the check on the paid invoice. Also when I do your tax return, I just want the summarized amounts for the year and not the receipts.