Deductible Expenses
Posted on May 28, 2021

“I can see clearly now the rain is gone. I can see all obstacles in my way. Gone are the dark clouds that had me blind.” Jimmy Parker Cliff

Tax time came and went! How was yours? Were you prepared or scrambling at the last minute?

Keeping your books caught and clean through the year is key to an easy tax filing. One question I often get is, “Which receipts do I need to keep?” If you plan to use an expense towards a tax credit or deduction, then you’ll need to have what the IRS calls “documentary evident” of that expense, aka, keep those receipts!

Here is a quick list:
-Charitable contribution receipts
-Sales tax receipts
-Mileage logs
-Gas receipts
-Student loan bills
-Tuition bills
-Mortgage bills or rent receipts
-Childcare bills
-Office expense receipts (supplies, marketing, materials)
-Self-employment insurance receipts
-Utility bills (for home offices)
-Medical bills including premiums, copays, unreimbursed Medicare expenses, exams, tests, hosptital stays including bills from the eye doctor, dentist, chiropractor, lactation consultant, podiatrist, psychiatrist, therapist, and most other medical professionals
-Traveling and transportation receipts reltated to medical appointments
-Weight-loss program bills
-Smoking cessation program bills
-Prescription receipts

You can save these in a folder or scan and upload them to the cloud. You can even attach them to your expense in QBO or Xero as extra backup!

The IRS can audit your tax return for up to three years after it is filed. So the minimum amount of time you should save receipts is three years. However, if you’ve grossly underreported your income, the IRS can come after you for a minumum of six years and maximum of forever. You should keep employment tax records for at least four years.

In addition to receipts, hold onto any tax documents like 1099s and W-2s, payroll records, and any evidence of income such as bank statements and invoices.

Start digitalizing all of your receipts today and organize them. Then have them in a safe place for a minumum of three years.#ildertonbookkeepingllc #knowyourbusiness #taxseason #receipts #cloudaccounting #taxdocuments #shoplocal #receipts #digitalize

Mt. Pleasant, SC