Accounting & Bookkeeping & Small Business Forum

[camrodecker]

I don't remember the site I was on but I read that if the dollar amount is under $75 then all is needed is a piece of paper with a signature and purpose. I am having trouble getting receipts from some officers and some amounts are over $75.00, how is that posted? I don't know too much about taxes.

[Richard Noot]

camrodecker wrote: I don't remember the site I was on but I read that if the dollar amount is under $75 then all is needed is a piece of paper with a signature and purpose. I am having trouble getting receipts from some officers and some amounts are over $75.00, how is that posted? I don't know too much about taxes.

No receipts no deduction. Plain and simple. Receipts are the basis for taking any deduction.

[Evangelist Tom Raymond]

What I always did when it came to receipts, no matter where I went, I always got receipts, unless I was in a situation where I couldn't get one, then I would write in the amount on a sheet of paper with the date and the purpose of that. At that time, I owned my own business like Amway, and I had to keep track of stuff like that in case I ever got audited with the date on my calendar, so it would coincide with each other.

Now, normally, as Richard has pointed out, no receipts, no deductions, meaning in order to take the deduction on your income taxes every year, you need the written proof or the paper proof saying that you did this for business. Take the officers for instance, and they travel, business wise, then in order to take the deduction of automobile expenses like depreciation and all that, you would need receipts for that to make it legal. Also, it's helpful in case you get audited for a deduction you weren't supposed to take in the first place, then you can say that you took it legally.

But as long as there are no reciepts on the day those events took place, you can't take the deduction unless you have proof. That way it covers your butt if something ever gets questioned. It's like taking a medical expense deduction on your Sch A and it's under the 7.5% floor of your AGI, it can't be done.

Regardless, if you're doing a tax return for a business or a corporation, in order to take the deduction, you do need proof saying that event actually happened within reason of the activity in order to deduct it on a Sch C or whatever form goes with that business.

[Evangelist Tom Raymond]

Now about the dollar amount, I don't think it really matters what amount is on that sheet of paper as long as it coincides with that purpose and reason. If you can, it's always better to get an actual receipt from where you get services, don't just take a sheet of paper, wing it, and write down anything from memory, it's easier to do it right after the activity, providing you didn't get a receipt.

Now, when I ran my business, i always traveled to meetings either in town or out of town, and I had to pay a certain amount to get into those meetings, so I was able to take those deductions for that purpose, but since they didn't make out receipts, I wrote out my own with the date and the purpose, along with my signature, but I also made sure that my calendar coincided with that peiece of paper, so if it ever got questioned by the IRS later, I would have proof saying that this was a normal business expense.

[JerryWeygandt]

Camrodecker,
Perhaps you were reading about per diem expenses to a particular city. Rates are not the same to all cities.

I'm just trying to help jog your memory.

If it was, then you will want to re-read the requirements.

[Richard Noot]

[quote="JerryWeygandt"]Camrodecker,
Perhaps you were reading about per diem expenses to a particular city. Rates are not the same to all cities.

I'm just trying to help jog your memory.

There are NO cities in the US that allows a $75.00 deduction without a receipt

[JerryWeygandt]

Sorry I was not clear in my post. I was not addressing the question of receipts or no receipts - yes, receipts are needed. I was just attempting to jog camrodecker's memory as to where he read something about $75. Apparently, it was not in per diem expenses, if there are no cities with a $75 rate.

[camrodecker]

Found the source of $75 exclusion, "...you won't necessarily lose your deduction as long as that expense was under $75. The IRS no longer requires you to provide receipts for deductible expenses under $75. But. . ." This is from an online business tool kit-- http://toolkit.cch.com/