Proof in an Audit

How do you prove a deduction?

First, a cancelled check, credit card charge or cash receipt.  BUT, that only proves you paid for something.

Second, an invoice showing what was paid. 

For example, you have a cancelled check to an insurance company.  It only proves you paid for something.  You might have paid your Grandmothers insurance policy instead of business liability.  So it takes the invoice AND proof of payment.

Every deduction it requires PROOF of PAYMENT and PROOF of the expense, meaning an invoice.

 

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