From: South Bend, Indiana

Dear TaxMama,

Am I required to keep receipts for business purchases of $10.00 or less, as proof of purchase, for the IRS?

This would be in addition to a canceled check.

Tova

 

Hi Tova,

It doesn't hurt to have those receipts.

Otherwise, that quickie business purchase of, say, a couple of rolls of scotch tape might have taken place at Sav-On. That's what the check says, right?

How does IRS know that the purchase was for business and not medications, or personal items?

Just drop all those little receipts into an envelope each month - and if you're ever audited and need to prove that the check to Sav-on was for office supplies - you will be able to prove it.

If you do a lot of running around for things like that, just keep an envelope in the car and drop the slip in.

You'll get some other good tips if you listen to this teleconference about tax tips and organization tools for small and Internet businesses. It costs nothing - listen!

And of course, you're going to find a lot of answers to the kinds of things you need to know to run your business in Small Business Taxes Made Easy

You know TaxMama' philosophy - discard no receipt before it's time!

Best Wishes,
Eva Rosenberg, MBA, EA