IRS Receipt Requirements: How to Substantiate Any Tax Write Off
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- Опубликовано: 4 авг 2024
- IRS Receipt requirements are important to know because they will guide you on how to substantiate any tax deduction in 2022.
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You're definitely going to want a clear way to substantiate any tax deduction you decide to take and you need to keep up with every little receipt. In fact, many IRS receipt requirements aren't as strict as you might think.
Timestamps
IRS Receipt Requirements Intro (0:00)
#1 Quick Summary of Tax Write-Offs (1:38)
#2 How to Substantiate a Tax Deduction (3:24)
#3 What Tax Receipts Do You Need to Keep? (6:31)
#4 Storing Proper Tax Documentations (9:06)
#5 How Long Must You Keep Records? (10:15)
#6 Tax Receipt & Document Tips (11:38)
#7 Important Note (12:50)
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Helpful tools I use:
- Quickbooks (for Bookkeeping): bit.ly/3ATx1F3
- ZenLedger (Crypto capital gains tax tool): bit.ly/3Lgabwf
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Disclaimer: The information provided in this video is for informational purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).
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10/10 video. Really appreciate you breaking it down!
Thank you for sharing this information Sean.
Excellent video! Going to watch more of your videos.
Thanks a lot for the helpful information! Your channel is amazing! I'm so worried about getting audited because I travel full time for RUclips and have so many expenses for flight and hotels it almost sounds unbelievable 😭😭😭
Crystal clear video, just what I was looking for as a freelancer trying to figure out all my business expenses. I thought I had to save out every single receipt to present to my CPA and to the IRS! Now I know, thanks! 🙏
Thank you!!! Really needed this info!!
I keep my receipts using Receipt Hog. Im using this video for learning! Thanks …
Excellent video. I appreciate you really breaking it down.
Thanks for watching, Malcom! I hope it serves you well 🤞🏽
Thanks for the tips very helpful
Thank you for this information 🙏🏽
Best tax advice on YT!
Thanks for the positive reinforcement and the comment for YT algorithm!
Great info!!!
Great video and definitely necessary
Glad you think so! thanks for commenting for the youtube algorithm
You guys are amazing! I am a CPA who has an unrelated small business. You do an amazing job of giving accurate information in an entertaining, easy to follow format. I will recommend your videos to other small business owners.
At the start of this year, I started keeping all of my receipts because I felt like it would make me more cognizant of my spending. I ordered a receipt holder/organizer from Amazon for $10. Each quarter, I plan to enter the expenses via a spreadsheet. So far, my most significant expenses are food and gas.
Love your channel btw-- great content!
food?unless you are a rstaurant.how do you take off food? l would take mileage ,not gas,oil,depreciation,ect......mileage is in the easy way 56 cents a mile!!!
v helpful video thanks
Thank you !!!!😊
This is a great video .Thanks. I just subbed.
Thanks for the sub!
Thank you!!!!
Best BUSINESS YT Channel!!
Wow thanks, Brittney! What kind of business do you have?
@@LYFEAccounting I have a notary business and vending machine business. I’d love if you could talk about notary tax deductions?
This came right on time for me. 👌🏾
So glad! Why though?
@@LYFEAccounting to know if I did my bookkeeping correctly since I just sent it to my tax preparer
Definitely stressing about my lack of organization around bookkeeping and receipts. Anyone else with me? Cause I’m feeling alone
To be honest I suck at 2
Nope I kinda suck at it I'm using my notebook to keep up with my spending and I have my parent do my taxes online it's so much better than the paper way
I’m tight there with you. I just filled an extension because I have no idea what I am doing! I’m completely unorganized 😢
*right there 😂
@@morgandragicevich6880😅😅😅😅😅😅😅😅ppl😅😅😅😊😅ppppp
I’m so happy that I now will only have to save my cash receipts 🥳
Thank you 🙏🏾
Thanks for watching! How do you currently keep up with your receipts?
I use rocket money! It's way better than quickbooks (I do my own bookkeeping). It takes a second to set up "rules" like quick books, but after that, it really does make bookkeeping so easy and it also has really helpful things like tracking savings, investments, subscriptions (it's helped me catch double charging subscriptions twice as a business owner), and even tracks upcoming biz bills. you can connect it to your credit cards and bank accounts, too, so when it's P&L time, it's really straightforward. I tried QB but I really hated how difficult and almost purposefully confusing to use
Would you recommend documenting all expenses under a single(debit) if you do not have a credit card available....i personally had a platinum cash app card sent to me and all expenses that i believe will be tied to my sole prop are only processed through that. Tips, receipts(take a picture), gas, snacks or a meal during launch time(break from working), cleaning supplies, accomodations for customers/riders, every time i cashout through the apps its tied to that one card or account( i try to limit the cashouts per week as much as is possible so it can remain organized for my adhd brains(this way it is more visibly seen if a bank needs my documentation and aren't confused in the process), im even going to include insurance and maintenance of my vehicle soon also my phone bill(i use 2 phones, both for business). All these are steps im taking to prep myself for filing an LLC before the end of the first quarter of this year. it's already the 3rd month
How would an "accountable plan for reimbursements" fit into this? I heard that it was something needed to be able to make certain types of expense claims affecting profits. Thanks!
I use Xero I’m not the biggest fan, but it’s not bad
Great video, I have a question? When working for your own business and then having a W2 from doing so, are you allowed to do some write off with that?
The short answer is: You can only write off things that pertains to your business-- not for the W2 portion.
@@chrispierce1305 facts
I got a extension on my taxes I'm just now getting ready to file. The Next tax season coming up I will like to see if you guys have a spot available for me to become your tax client. Thank you I will appreciate that
hey, I have a question. How do I go about writing off purchases for equipment and products bought before the business was formed? As well as with a personal debit/credit card instead of business debit/credit card?
Elmer, they are startup costs. GAAP rule says expense immediately if they have no long-term benefit. IRS says if over $50k, expense $5k and amortize the $45k over 180 months.
What is the best app to capture receipts? Any suggestion?
I have a business bank account now, but at the beginning of This year I use my personal account now as a sole proprietor am I able to Write off my business meal receipts From before I open my business account?
To answer your question before video really starts, I keep receipts by putting them on a pouch😭 have a feeling I’m doing it wrong lol
I write my receipt in a ledger,write a title/summary in bold on receipt, take photo of receipt, put receipt in folder. At end of year I type it into excel and compare it to bank statement, then write summary for tax office. I gather receipts from stores, businesses, banks, utilities, etc. I think I'm overdoing this. I had to drop that business and am trying to start a different business with o income for months and extreme startup purchases
When we started our business we used personal credit cards to make purchases can that be written off as well
Sean, Great video! Quick question: I vend at two annual trade shows. At both, vendors are requested to donate product for show events, like silent auctions, raffles, etc. I've never been given a receipt for my donations but I know what they were. Do you think reporting the amounts would trigger an audit? The amounts are negligible (avg. $80 per show).
if it only 2 shows,FORGET IT!thats like pennys!why take a chance?!I DONT TAKE OFFICE USE IN MY HOME EVEN....its a small deducction and will be RECAAPTURED AND TAXABLE when you sell!
Question: I use RUclips, Audible, and Amazon Prime ALMOST exclusively for my counseling business. I purchase books and audio books, and watch RUclips videos to educate myself on the latest research in my field, to learn new techniques and counseling interventions, and to have a repertoire of learning material for my clients that I am familiar with and can ethically recommend. Can these subscriptions be written off?
as a new flight instructor, can i write off food/coffee for when I take my students to study somewhere?
Great videos Always. I am needing some assistance/services with my taxes.. do you have any availability?? I have an in home bakery/llc and haven’t filed…At all yet
Hey Jennifer, thanks! You can book an appointment with us at lyfetaxes.com
Hello I have a question. what if you used your personal credit card when you first started out? Buying a website and business plan and etc. will that still qualify for a accurate tax write off?!
Hello, I do bookkeeping for small businesses. Yes , those expenses also qualify but will need to be recorded as owner's contribution in your bookkeeping system.
Do you have suggestions on if/how to document Venmo or other cash app payments from clients?
The payment processors are starting to send 1099Ks, but you should also try using a software like Quickbooks to sync venmo and cash app
Thought Zelle was bank to bank transfer so excluded from the 1099-k can you show us where you determined that zelle is included. Overall very educational always love y’all content!
Well personal zelle is what I meant I know business zelle is available and should expect to receive 1099-k
I believe they will be tracking any zelle transaction that are over $600
@@LYFEAccounting That is correct as of January 2022.
Turbo Tax didn’t ask me for any receipts. Will the irs ask me later? I saved receipts but TT didn’t ask for them.
I have a situation where I pay rent plus the tax for the building every 6 months. Am I able to write off the tax off the building even though I’m not the owner of the building?
No keeping with all my receipts😏
what about if I needed to purchase things out of my personal account before my business was established and had revenue to do its own expenses?
I do bookkeeping for small businesses. Those expenses are considered start up cost and will need to be recorded as owner's contribution in your bookkeeping system. You can deduct your start up costs up to an amount
as a doordasher are my meals a tax write off?
I have a folder that I toss my receipts in. It is bulging at the seams. Maybe Ill sort it next week...
Do you have a lot of cash transactions?
@@LYFEAccounting No, its my etsy shop. I just buy things and keep all the receipts to match against my DBA checking account. I have registered as a small entity business with my county. I have not "paid" myself yet, just bought upgrades to the shop. Well, my wife and I go on business lunches once a week to discuss things related to the business of course.
Hi Sean, I am a newbie virtual Bookkeeper and I am working on bank feeds in QBO or manual input of expenses using the bank statements. So my task is to categorize the expenses. Since bank statements only indicates the name of the vendor where the clients made the purchases like Amazon, ebay, etc., there is no details as to the items being purchased and the amount per line item in the bank statement is already the total amount purchased. Do I need to dig deeper as to what items they bought? Or I'll just categorize them by searching the vendor name and see what Items they usually sell? Thank you!
If the client has a large number of transactions taking place on general online marketplaces then we ask clients to share their login info, so we can properly categorize
What happens if your business only makes less than $1000.00 a year. Im a small business llc owner, no employees.
Yup. File folders by month. Lol
I advise my clients to Use a debit or credit card for their purchases and your statement is now your “receipt”. Don’t send me all those receipts!
Most statements are not descriptive enough without a receipt or invoice so on their own wont hold up as a source document to substantiate the expense under audit.
@@mtigress4589 Valid point for paper statements. However, most accounts have an App that will give you access to details of your purchases and the option to view your receipt. Some also allow you to categorize and edit descriptions. So, I guess a better description would be to maintain an electronic statement of purchases.
@@MsRaye-23 true true. Ugh, it's just a nightmare on the auditing side because you can only allow so much without seeing details and not everyone is keeping a good record and don't know how to prove the items later.
Thanks to the false information givers on tik tok lol...
Building Wealth* Only an idiot would seriously take anything about IRS or financial from TikTok.
@@marvelouss719 Exactly and they come to me all the time with the I seen on tik tok that I will get the money for my car or something that I have to end up explain to them all the time... it's insane
HOW ABOUT WE STOP GIVING VALIDATION TO THE IRS AND FORCE OUT GVERNMENT TO MAKE TAXATION LESS COMPLICATED,WHY DO WE NEED TO LEARN THIS SH8 AS ADULTS ,THIS IS MADNESS ,WE NEED TO FORCE A NEW CULTURE ..