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Going somewhere? Audit-proof the business deductions

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in Centerpiece,Small Business Tax,Small Business Tax Deduction Strategies

IRS websiteThe tax law allows you to deduct travel and entertainment (T&E) expenses related to the active conduct of your business. But don’t expect the IRS to like it.

Alert: T&E deductions remain a top audit target for IRS examiners. That’s because this area is considered ripe for abuse by taxpayers.

However, if you follow the strict record-­keeping requirements established by the IRS regulations, you should be able to stand up to any challenges the IRS might mount.

Here’s the whole story: For starters, the IRS says you must maintain “adequate records” to substantiate T&E deductions. You can’t deduct amounts that are approximated or estimated without fear of reprisal.

For this purpose, adequate records include an account book, diary, log, statement of expense, trip sheets or similar types of records. You should also keep documentary evidence that, coupled with the records mentioned above, can support each element of an expense. Both ...(register to read more)

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