Are copies of receipts good enough justification for taking business expenses for my S-Corp?Or do I need to originals.My client requires the originals.
<<Are copies of receipts good enough justification for taking business expenses for my S-Corp?Or do I need to originals.My client requires the originals. >>I'm not sure that I follow. Simple receipts (either originals or copies) don't automatically allow a deduction. All deductions must meet the "ordinary and necessary" rules in order to be allowable. For example, say I purchase a heart-lung machine for my tax practice. I keep the original receipt. Is this machine an "ordinary and necessary" expense for my business? Likely not...since I'm not performing any heart transplants in the office. So even with the receipt, it's likely that I'll receive NO deduction for the purchase of the machine. See what I'm driving at? Assuming that your expenses meet the "ordinary and necessary" rules, then the receipt/invoice AND a copy of the cancelled check (or other payment document) showing the actual payment should be fine. I always recommend keeping the ORIGINAL invoice or receipt, that way there is no future hassle. IMHO, copies of the invoice/receipt should only be used when you can't get your hands on the original. Hopefully that won't happen often. TMF TaxesRoy
Are copies of receipts good enough justification for taking business expenses for my S-Corp? Or do I need to originals. My client requires the originals. I am making the assumption that your corp. bills your client for the expenses so that the corp. gets reimbursed for the out of pocket expenses so effectively you show the reimbursement as income and then expense your costs for a net zero. You can use copies of your receipts to justify your expenses but I would attach a copy of the invoice to the client stating on your copy that the client requires the original. This way the whole transaction is clearly shown and should prevent any questions related to the expenses or reimbursements.
Let us alos not forget that anything OVER $75 must be substantiated with a receiept AND business purpose etc...
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