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More examples:
- Shipping materials
- Storage and filing boxes
- Memo and message pads, Post-it notepads
- Whiteboards and markers
- Cleaning supplies
- Calendars and planners
- Staples, staplers, paper clips, scissors
- Tape, tape dispensers, rulers
- Calculators
I do not know exact amount so I can guess I spent 100 on pens.
But suppose the auditor calculates 25.
This means I was wrong by 75%.
Would there be a fine for that line.
Should I write few lines in expenses so I do not get a high fine per line.
When dealing with the IRS and your taxes, you do not guess.
You write the amount you can PROVE if/when you get audited.
Claim only what you have receipts for!
I don't.
I just put all that stuff on a business credit card. Mint categorizes 95%+ of it for me. No need to keep receipts for that kind of stuff. The records are kept in a timely manner without me lifting a finger for the most part. The supporting evidence of the date, amount, and purpose are all recorded. I can click on my "office expense" line item and expand it to show when a purchase was made, what the amount was, and a general description of its business purpose ("office expenses"), which is exactly what is required. Simply stating you think you spent $200 on office expenses, however, is a no go. You're good as long as you don't get audited of course, but you need records that are kept timely (generally considered to be within a week of the expense occurring) as supporting evidence. You don't need a shoe box of receipts though. It's one way of doing it but having actually done the shoe box method before I got smarter half the receipts will have faded anyway. A ledger method is easier and better than relying on receipts.
When in doubt, employ the rule of $75. Amounts $75 and under do not need to be substantiated. That doesn't work for $75 on highlighters, $75 on pencils, $75 on thumbtacks, $75 on whiteout. It does work on $75 for office expenses. I'm having serious trouble though figuring out how a B&B spends $100 on pens. I spent about $20 on a pack of pens and still have most of them sitting in a drawer.
I just put all that stuff on a business credit card. Mint categorizes 95%+ of it for me. No need to keep receipts for that kind of stuff. The records are kept in a timely manner without me lifting a finger for the most part. The supporting evidence of the date, amount, and purpose are all recorded. I can click on my "office expense" line item and expand it to show when a purchase was made, what the amount was, and a general description of its business purpose ("office expenses"), which is exactly what is required. [/quote]
That is your receipt of the expenses. You DO have proof
It shows on, say, 5-12-2015 that I spent $50.23 at Office Depot. It doesn't show what I specifically bought as a receipt does nor is that required. It's just a credit card statement that Mint has organized in a more useful fashion which is not a receipt. Anything I spend at Office Depot is simply lumped into office expenses for me. Say I bought a new camera at Office Depot for $1,000 using my business credit card or bought the back to school supplies for the kids. Mint would categorize that as an office expense. A DSLR camera is not a necessary business expense in my line of work. I've never used one. Even if it were, cameras are depreciated and not expensed and it wouldn't be the proper way of accounting for it for tax purposes. In that case I'd need to manually correct the ledger. What I have is substantial proof, but it's not a receipt by any means. With Office Depot, I probably also do have the receipts as I'm pretty sure they will email you the receipt which I always elect over a paper receipt. I don't keep paper receipts though and electronic isn't always available.
Not speaking from experience but I suspect if it is within reason the IRS will accept it. $50 a month at Office Depot is $600 a year. If you have 60K in income then it is 1% of sales.......reasonable. If you have $1000 in sales, then $600 in expenses seems high (60% of gross sales).
I would say office supplies. No detail. If audited explain what you did and why.
Start keeping receipts.
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