Receipts required?

[Super Mom]

I have a client being audited by the state and she says that she was told the bank statement is the only receipt she needs if the expenses were debited

Now it has always been my understanding that clients must have receipts to back up all on bank statements and credit card statements, but now I'm doubting. Any experience with this?

[ATSMAN]

I have a client being audited by the state and she says that she was told the bank statement is the only receipt she needs if the expenses were debited

Now it has always been my understanding that clients must have receipts to back up all on bank statements and credit card statements, but now I'm doubting. Any experience with this?

I am not sure which state you are talking about but MA DOR will accept a bank statement showing the amount as a payment (debit card, check or ach debit) if a receipt is lost and there are other records to substantiate that it was a valid business expense.

[David1980]

I always advise my clients to save receipts because a bank statement isn't going to tell you what was purchased. Let's say they have a bank statement showing they spent $1,000 at Walmart. How would I know whether they bought $1,000 of stuff for their business or $1,000 of personal goods?

[Burke]

Exactly. Don't think the IRS would take a bank statement alone, and I always tell my clients the same thing. I might use it to do the return, but it depends on what it is and what the identifying information is on the debit. Like a utility bill? No problem with that.

[TAXNJ]

Verify

I have a client being audited by the state and she says that she was told the bank statement is the only receipt she needs if the expenses were debited

Now it has always been my understanding that clients must have receipts to back up all on bank statements and credit card statements, but now I'm doubting. Any experience with this?

If you are representing the audit client, did you get the same information from the auditor? If from client only sometimes info gets lost in the translation.

Also see what the particular state website requires.

IRS requirements you should know.

[kamckinley]

Doesn't it depend on the type of deduction and the amount? For example, for donations, bank statements can be used to document donations under $250. Are there similar rules for other types of deductions?

[TAXNJ]

Take

Doesn't it depend on the type of deduction and the amount? For example, for donations, bank statements can be used to document donations under $250. Are there similar rules for other types of deductions?

Take it up with the auditor. You will know for sure.