Cynthia A. Wilkinson, CPA

Whether you are self-employed or you incur expenses in performing your job, you are required to substantiate business expenditures. Substantiating is done by keeping adequate records or by sufficient evidence that corroborates your own statements. To meet this "adequate record requirement test", you must maintain items such as account book, a diary, a log, a statement of expense, trip sheet, or similar records, and documentary evidence such as receipts or bills, which in combination, are sufficient to establish each element of the expense or use. This includes business travel, entertainment, meals, business gifts, auto use and other types of business expenses. Estimates are not sufficient evidence. And your records need to match up with each other. IRS and the Courts consider mismatched records to be unreliable and will disallow the deductions. According to a recent court case, checks and bank drafts alone are not sufficient to prove your expense.

updated 2/2/15