Not sure what constitutes proof of expenses when you and your bookkeeper sit down to figure out your 1999 taxes? Did your accounting department misplace that cancelled check you need to document one of your top manager’s business expenses?
Well, there are several ways to prove expenses beyond cancelled checks, according to the American Institute of Professional Bookkeepers. Here are three that may help you — and your bean counter — come filing time:
1. An account statement showing that the check has cleared, the check number, check amount, payee’s name and date that the amount was posted to the account by the financial institution.
2. An account statement showing an electronic funds transfer, the amount transferred, payee’s name and the date that the transfer was posted to the account by the financial institution.
3. An account statement showing a credit card charge, the amount charged, payee’s name and the date charged.
Obviously, hanging onto those cancelled checks is the best way to stand on solid ground with the IRS, but if your secretary misplaces the safe, at least you can still get every deduction you having coming your way — including a write-off for the lost safe.
How to reach: American Institute of Professional Bookkeepers, (800) 622-0121
