Unsubstantiated deductions may not make the cut in an audit.

Think twice before you throw away that receipt from the office supply store or post office if you plan on deducting these items when tax time comes around. If you are audited and do not have proof of expenditures or adequate financial records in the form of canceled checks, copies of deposit slips, credit card statements and receipts, you may be paying some unexpected taxes and facing some penalties. Deductions are allowed if the good or service in question is directly necessary to carrying out your business. (For example: office supplies, office equipment, and the business use of a vehicle.) Keep in mind that all money deposited into your bank account during any given tax year is considered taxable income unless you are able to provide specific evidence that it is deductible. The burden of evidence is always on the taxpayer, so keep good records and call your accountant
if you have questions about deductible expenditures.



Made by Andrea Micheloni