Quicken allows you to scan receipts into the line item and it works well.
However, it is time consuming and I've found that simple monthly drop files
work well for each of my businesses.
Quciken tells me year and month and I can go to that file quickly. I've
done IRS office audits and the auditor was good with original receipts even
from gas. The secret really is how you
establish the relationship with the auditor and the notes that you have made
on the receipts. How the expense relates to your business. It is true that
the thermal receipts fade after about
three years and for things important probably should either be copied or
scanned.
On Wed, Dec 15, 2010 at 6:42 AM, James Parker <dakota.kid@mindspring.com>wrote:
>
>
> > Incidentally, I withstood an audit on my third year in business,
> > lucky me.
> > Turbo Tax and Quicken were life savers because every little dollar
> > in or
> > dollar out was duly noted and accounted for. The IRS auditor just
> > loved my
> > files, seriously.
>
> One thing I will say about Turbo Tax and Quicken, which I have used
> for years. In an audit, the IRS needs copies of ACTUAL RECEIPTS, not
> line items in an accounting program, for documentation. The reports
> from Quicken are a big help, but you MUST back them up with real
> receipts. Statements from gas cards and credit cards are not
> sufficient. I asked an agent about this once, and she told me that
> many people put gum and cigarettes on their gas credit cards, and the
> credit card statement only shows the total. This applies to most
> everything, from supplies at Michaels, to the stuff you buy at the
> convenience store when pumping gas. Keep it separate.
>
> This I learned from an audit two years ago. Although I save receipts,
> many older thermal receipts fade and become illegible, which renders
> them useless for the IRS. They will disallow those expenses if you
> don't have 'em. Missing receipts don't count, either.
>
> The best way to save receipts is to put each type of tax line item
> receipt in its own envelope or folder. Auto receipts broken down by
> gasoline, oil & tires, maintenance, and so forth. Even though your
> bookkeeping system may handle it differently, having your records
> match the IRS methods of accounting definitely helps in an audit. Try
> to keep expenses for different things separate. In other words, don't
> buy mat board and masking tape on the same ticket as paint brushes and
> supplies for the kiddies. It helps.
>
> Jim Parker
> parkerparker :: design | photography
> http://www.parkerparker.info
> @dakkid / twitter
>
> [Non-text portions of this message have been removed]
>
>
>
--
*Michael*
ChristopherMichael.com
[Non-text portions of this message have been removed]
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