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2012 1040x 5. 2012 1040x Recordkeeping Table of Contents How To Prove ExpensesWhat Are Adequate Records? What If I Have Incomplete Records? Separating and Combining Expenses How Long To Keep Records and Receipts Examples of Records If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expense. 2012 1040x This chapter discusses the records you need to keep to prove these expenses. 2012 1040x If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. 2012 1040x You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan. 2012 1040x These plans are discussed in chapter 6 under Reimbursements . 2012 1040x How To Prove Expenses Table 5-1 is a summary of records you need to prove each expense discussed in this publication. 2012 1040x You must be able to prove the elements listed across the top portion of the chart. 2012 1040x You prove them by having the information and receipts (where needed) for the expenses listed in the first column. 2012 1040x You cannot deduct amounts that you approximate or estimate. 2012 1040x You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. 2012 1040x You must generally prepare a written record for it to be considered adequate. 2012 1040x This is because written evidence is more reliable than oral evidence alone. 2012 1040x However, if you prepare a record on a computer, it is considered an adequate record. 2012 1040x What Are Adequate Records? You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record. 2012 1040x You should also keep documentary evidence that, together with your record, will support each element of an expense. 2012 1040x Documentary evidence. 2012 1040x You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses. 2012 1040x Exception. 2012 1040x Documentary evidence is not needed if any of the following conditions apply. 2012 1040x You have meals or lodging expenses while traveling away from home for which you account to your employer under an accountable plan, and you use a per diem allowance method that includes meals and/or lodging. 2012 1040x ( Accountable plans and per diem allowances are discussed in chapter 6. 2012 1040x ) Your expense, other than lodging, is less than $75. 2012 1040x You have a transportation expense for which a receipt is not readily available. 2012 1040x Adequate evidence. 2012 1040x Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. 2012 1040x For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information. 2012 1040x The name and location of the hotel. 2012 1040x The dates you stayed there. 2012 1040x Separate amounts for charges such as lodging, meals, and telephone calls. 2012 1040x A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. 2012 1040x The name and location of the restaurant. 2012 1040x The number of people served. 2012 1040x The date and amount of the expense. 2012 1040x If a charge is made for items other than food and beverages, the receipt must show that this is the case. 2012 1040x Canceled check. 2012 1040x A canceled check, together with a bill from the payee, ordinarily establishes the cost. 2012 1040x However, a canceled check by itself does not prove a business expense without other evidence to show that it was for a business purpose. 2012 1040x Duplicate information. 2012 1040x You do not have to record information in your account book or other record that duplicates information shown on a receipt as long as your records and receipts complement each other in an orderly manner. 2012 1040x You do not have to record amounts your employer pays directly for any ticket or other travel item. 2012 1040x However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend. 2012 1040x Timely-kept records. 2012 1040x You should record the elements of an expense or of a business use at or near the time of the expense or use and support it with sufficient documentary evidence. 2012 1040x A timely-kept record has more value than a statement prepared later when generally there is a lack of accurate recall. 2012 1040x You do not need to write down the elements of every expense on the day of the expense. 2012 1040x If you maintain a log on a weekly basis that accounts for use during the week, the log is considered a timely-kept record. 2012 1040x If you give your employer, client, or customer an expense account statement, it can also be considered a timely-kept record. 2012 1040x This is true if you copy it from your account book, diary, log, statement of expense, trip sheets, or similar record. 2012 1040x Proving business purpose. 2012 1040x You must generally provide a written statement of the business purpose of an expense. 2012 1040x However, the degree of proof varies according to the circumstances in each case. 2012 1040x If the business purpose of an expense is clear from the surrounding circumstances, then you do not need to give a written explanation. 2012 1040x Example. 2012 1040x If you are a sales representative who calls on customers on an established sales route, you do not have to give a written explanation of the business purpose for traveling that route. 2012 1040x You can satisfy the requirements by recording the length of the delivery route once, the date of each trip at or near the time of the trips, and the total miles you drove the car during the tax year. 2012 1040x You could also establish the date of each trip with a receipt, record of delivery, or other documentary evidence. 2012 1040x Confidential information. 2012 1040x You do not need to put confidential information relating to an element of a deductible expense (such as the place, business purpose, or business relationship) in your account book, diary, or other record. 2012 1040x However, you do have to record the information elsewhere at or near the time of the expense and have it available to fully prove that element of the expense. 2012 1040x What If I Have Incomplete Records? If you do not have complete records to prove an element of an expense, then you must prove the element with: Your own written or oral statement containing specific information about the element, and Other supporting evidence that is sufficient to establish the element. 2012 1040x If the element is the description of a gift, or the cost, time, place, or date of an expense, the supporting evidence must be either direct evidence or documentary evidence. 2012 1040x Direct evidence can be written statements or the oral testimony of your guests or other witnesses setting forth detailed information about the element. 2012 1040x Documentary evidence can be receipts, paid bills, or similar evidence. 2012 1040x If the element is either the business relationship of your guests or the business purpose of the amount spent, the supporting evidence can be circumstantial rather than direct. 2012 1040x For example, the nature of your work, such as making deliveries, provides circumstantial evidence of the use of your car for business purposes. 2012 1040x Invoices of deliveries establish when you used the car for business. 2012 1040x Table 5-1. 2012 1040x How To Prove Certain Business Expenses IF you have expenses for . 2012 1040x . 2012 1040x THEN you must keep records that show details of the following elements . 2012 1040x . 2012 1040x . 2012 1040x Amount Time Place or Description Business Purpose Business Relationship Travel Cost of each separate expense for travel, lodging, and meals. 2012 1040x Incidental expenses may be totaled in reasonable categories such as taxis, fees and tips, etc. 2012 1040x Dates you left and returned for each trip and number of days spent on business. 2012 1040x Destination or area of your travel (name of city, town, or other designation). 2012 1040x Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. 2012 1040x Relationship: N/A Entertainment Cost of each separate expense. 2012 1040x Incidental expenses such as taxis, telephones, etc. 2012 1040x , may be totaled on a daily basis. 2012 1040x Date of entertainment. 2012 1040x (Also see Business Purpose. 2012 1040x ) Name and address or location of place of entertainment. 2012 1040x Type of entertainment if not otherwise apparent. 2012 1040x (Also see Business Purpose. 2012 1040x ) Purpose: Business purpose for the expense or the business benefit gained or expected to be gained. 2012 1040x For entertainment, the nature of the business discussion or activity. 2012 1040x If the entertainment was directly before or after a business discussion: the date, place, nature, and duration of the business discussion, and the identities of the persons who took part in both the business discussion and the entertainment activity. 2012 1040x Relationship: Occupations or other information (such as names, titles, or other designations) about the recipients that shows their business relationship to you. 2012 1040x For entertainment, you must also prove that you or your employee was present if the entertainment was a business meal. 2012 1040x Gifts Cost of the gift. 2012 1040x Date of the gift. 2012 1040x Description of the gift. 2012 1040x Transportation Cost of each separate expense. 2012 1040x For car expenses, the cost of the car and any improvements, the date you started using it for business, the mileage for each business use, and the total miles for the year. 2012 1040x Date of the expense. 2012 1040x For car expenses, the date of the use of the car. 2012 1040x Your business destination. 2012 1040x Purpose: Business purpose for the expense. 2012 1040x Relationship: N/A Sampling. 2012 1040x You can keep an adequate record for parts of a tax year and use that record to prove the amount of business or investment use for the entire year. 2012 1040x You must demonstrate by other evidence that the periods for which an adequate record is kept are representative of the use throughout the tax year. 2012 1040x Example. 2012 1040x You use your car to visit the offices of clients, meet with suppliers and other subcontractors, and pick up and deliver items to clients. 2012 1040x There is no other business use of the car, but you and your family use the car for personal purposes. 2012 1040x You keep adequate records during the first week of each month that show that 75% of the use of the car is for business. 2012 1040x Invoices and bills show that your business use continues at the same rate during the later weeks of each month. 2012 1040x Your weekly records are representative of the use of the car each month and are sufficient evidence to support the percentage of business use for the year. 2012 1040x Exceptional circumstances. 2012 1040x You can satisfy the substantiation requirements with other evidence if, because of the nature of the situation in which an expense is made, you cannot get a receipt. 2012 1040x This applies if all the following are true. 2012 1040x You were unable to obtain evidence for an element of the expense or use that completely satisfies the requirements explained earlier under What Are Adequate Records . 2012 1040x You are unable to obtain evidence for an element that completely satisfies the two rules listed earlier under What If I Have Incomplete Records . 2012 1040x You have presented other evidence for the element that is the best proof possible under the circumstances. 2012 1040x Destroyed records. 2012 1040x If you cannot produce a receipt because of reasons beyond your control, you can prove a deduction by reconstructing your records or expenses. 2012 1040x Reasons beyond your control include fire, flood, and other casualties. 2012 1040x Table 5-2. 2012 1040x Daily Business Mileage and Expense Log Name: Odometer Readings Expenses Date Destination (City, Town, or Area) Business Purpose Start Stop Miles this trip Type (Gas, oil, tolls, etc. 2012 1040x ) Amount Weekly Total Total Year-to-Date Separating and Combining Expenses This section explains when expenses must be kept separate and when expenses can be combined. 2012 1040x Separating expenses. 2012 1040x Each separate payment is generally considered a separate expense. 2012 1040x For example, if you entertain a customer or client at dinner and then go to the theater, the dinner expense and the cost of the theater tickets are two separate expenses. 2012 1040x You must record them separately in your records. 2012 1040x Season or series tickets. 2012 1040x If you buy season or series tickets for business use, you must treat each ticket in the series as a separate item. 2012 1040x To determine the cost of individual tickets, divide the total cost (but not more than face value) by the number of games or performances in the series. 2012 1040x You must keep records to show whether you use each ticket as a gift or entertainment. 2012 1040x Also, you must be able to prove the cost of nonluxury box seat tickets if you rent a skybox or other private luxury box for more than one event. 2012 1040x See Entertainment tickets in chapter 2. 2012 1040x Combining items. 2012 1040x You can make one daily entry in your record for reasonable categories of expenses. 2012 1040x Examples are taxi fares, telephone calls, or other incidental travel costs. 2012 1040x Meals should be in a separate category. 2012 1040x You can include tips for meal-related services with the costs of the meals. 2012 1040x Expenses of a similar nature occurring during the course of a single event are considered a single expense. 2012 1040x For example, if during entertainment at a cocktail lounge, you pay separately for each serving of refreshments, the total expense for the refreshments is treated as a single expense. 2012 1040x Car expenses. 2012 1040x You can account for several uses of your car that can be considered part of a single use, such as a round trip or uninterrupted business use, with a single record. 2012 1040x Minimal personal use, such as a stop for lunch on the way between two business stops, is not an interruption of business use. 2012 1040x Example. 2012 1040x You make deliveries at several different locations on a route that begins and ends at your employer's business premises and that includes a stop at the business premises between two deliveries. 2012 1040x You can account for these using a single record of miles driven. 2012 1040x Gift expenses. 2012 1040x You do not always have to record the name of each recipient of a gift. 2012 1040x A general listing will be enough if it is evident that you are not trying to avoid the $25 annual limit on the amount you can deduct for gifts to any one person. 2012 1040x For example, if you buy a large number of tickets to local high school basketball games and give one or two tickets to each of many customers, it is usually enough to record a general description of the recipients. 2012 1040x Allocating total cost. 2012 1040x If you can prove the total cost of travel or entertainment but you cannot prove how much it cost for each person who participated in the event, you may have to allocate the total cost among you and your guests on a pro rata basis. 2012 1040x To do so, you must establish the number of persons who participated in the event. 2012 1040x An allocation would be needed, for example, if you did not have a business relationship with all of your guests. 2012 1040x See Allocating between business and nonbusiness in chapter 2. 2012 1040x If your return is examined. 2012 1040x If your return is examined, you may have to provide additional information to the IRS. 2012 1040x This information could be needed to clarify or to establish the accuracy or reliability of information contained in your records, statements, testimony, or documentary evidence before a deduction is allowed. 2012 1040x THIS IS NOT AN OFFICIAL INTERNAL REVENUE FORM Table 5-3. 2012 1040x Weekly Traveling Expense and Entertainment Record From: To: Name: Expenses Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total 1. 2012 1040x Travel Expenses: Airlines Excess Baggage Bus – Train Cab and Limousine Tips Porter 2. 2012 1040x Meals and Lodging: Breakfast Lunch Dinner Hotel and Motel (Detail in Schedule B) 3. 2012 1040x Entertainment (Detail in Schedule C) 4. 2012 1040x Other Expenses: Postage Telephone & Telegraph Stationery & Printing Stenographer Sample Room Advertising Assistant(s) Trade Shows 5. 2012 1040x Car Expenses: (List all car expenses - the division between business and personal expenses may be made at the end of the year. 2012 1040x ) (Detail mileage in Schedule A. 2012 1040x ) Gas, oil, lube, wash Repairs, parts Tires, supplies Parking fees, tolls 6. 2012 1040x Other (Identify) Total Note: Attach receipted bills for (1) ALL lodging and (2) any other expenses of $75. 2012 1040x 00 or more. 2012 1040x Schedule A – Car Mileage: End Start Total Business Mileage Schedule B – Lodging Hotel or Motel Name City Schedule C – Entertainment Date Item Place Amount Business Purpose Business Relationship WEEKLY REIMBURSEMENTS: Travel and transportation expenses Other reimbursements TOTAL How Long To Keep Records and Receipts You must keep records as long as they may be needed for the administration of any provision of the Internal Revenue Code. 2012 1040x Generally, this means you must keep records that support your deduction (or an item of income) for 3 years from the date you file the income tax return on which the deduction is claimed. 2012 1040x A return filed early is considered filed on the due date. 2012 1040x For a more complete explanation of how long to keep records, see Publication 583, Starting a Business and Keeping Records. 2012 1040x You must keep records of the business use of your car for each year of the recovery period. 2012 1040x See More-than-50%-use test in chapter 4 under Depreciation Deduction. 2012 1040x Reimbursed for expenses. 2012 1040x Employees who give their records and documentation to their employers and are reimbursed for their expenses generally do not have to keep copies of this information. 2012 1040x However, you may have to prove your expenses if any of the following conditions apply. 2012 1040x You claim deductions for expenses that are more than reimbursements. 2012 1040x Your expenses are reimbursed under a nonaccountable plan. 2012 1040x Your employer does not use adequate accounting procedures to verify expense accounts. 2012 1040x You are related to your employer as defined under Per Diem and Car Allowances , in chapter 6. 2012 1040x Reimbursements , adequate accounting , and nonaccountable plans are discussed in chapter 6. 2012 1040x Examples of Records Table 5-2 and Table 5-3 are examples of worksheets which can be used for tracking business expenses. 2012 1040x Prev Up Next Home More Online Publications
Contact My Local Office in Alaska
Face-to-face Tax Help
IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.
Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.
We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.
If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.
Caution: Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.
Multilingual assistance is available in every office. Hours of operation are subject to change.
Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.
||Days/Hours of Service
||949 E. 36th Ave.
Anchorage, AK 99508
Monday-Friday - 8:30 a.m.- 4:30 p.m.
**This office will be open until 6:00 p.m. on 4/14 & 4/15**
||101 12th Ave.
Fairbanks, AK 99701
Monday-Friday -8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:30 p.m.-1:30 p.m.)
* Note: The phone numbers in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses).
For information on where to file your tax return please see Where to File Addresses.
The Taxpayer Advocate Service: Call 907-271-6877 in the Anchorage area or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see Tax Topic 104.
IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.
For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:
|Internal Revenue Service
949 E 36th Ave MS A 180
Anchorage, AK 99508
For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:
Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.
Page Last Reviewed or Updated: 28-Mar-2014
The 2012 1040x
2012 1040x Index Symbols 1099-C, Persons who each receive a Form 1099-C showing the full amount of debt. 2012 1040x 501(c)(3) organizations, Section 501(c)(3) organization. 2012 1040x A Abandonments, Abandonments Canceled debt, Canceled debt. 2012 1040x Assistance (see Tax help) B Bankruptcy, Bankruptcy Reduction of tax attributes, Bankruptcy and Insolvency Business Real property indebtedness, Qualified Real Property Business Indebtedness C Canceled debt, Canceled Debts, Persons who each receive a Form 1099-C showing the full amount of debt. 2012 1040x Exceptions Deductible debt, Deductible Debt Gifts, Gifts, Bequests, Devises, and Inheritances Price reduced after purchase, Price Reduced After Purchase Student loans, Student Loans Exclusions Bankruptcy, Bankruptcy Insolvency, Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Co-owners, Persons who each receive a Form 1099-C showing the full amount of debt. 2012 1040x D Debts Stockholder's, Stockholder debt Definitions Adjusted tax attributes, Adjusted tax attributes. 2012 1040x Main home, Main home. 2012 1040x Qualified acquisition indebtedness, Definition of qualified acquisition indebtedness. 2012 1040x Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness E Educational loans, Student Loans Exceptions Home Affordable Modification Program, Home Affordable Modification Program F Farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Foreclosures, Foreclosures and Repossessions Form 1099-A, Forms 1099-A and 1099-C. 2012 1040x , Forms 1099-A and 1099-C. 2012 1040x 1099-C, Forms 1099-A and 1099-C. 2012 1040x , Forms 1099-A and 1099-C. 2012 1040x Free tax services, Free help with your tax return. 2012 1040x G Gifts, Gifts, Bequests, Devises, and Inheritances H Help (see Tax help) Home Affordable Modification Program, Home Affordable Modification Program I Income from, Canceled Debts Income from canceled debt, Canceled Debts Insolvency, Insolvency Reduction of tax attributes, Bankruptcy and Insolvency L Limits Excluded farm debt, Exclusion limit. 2012 1040x Excluded principal residence indebtedness, Exclusion limit. 2012 1040x Qualified real property business indebtedness, Exclusion limit. 2012 1040x Loans Student, Student Loans M Missing children, photographs of, Reminder Mortgage Debt Relief Act (see Qualified Principal Residence Indebtedness) P Principal residence indebtedness, Qualified Principal Residence Indebtedness Publications (see Tax help) Q Qualified farm indebtedness, Qualified Farm Indebtedness Reduction of tax attributes, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Reduction of tax attributes, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Reduction of tax attributes, Qualified Real Property Business Indebtedness R Real property business indebtedness, Qualified Real Property Business Indebtedness Recapture Basis reductions, Recapture of basis reductions. 2012 1040x Repossessions, Foreclosures and Repossessions S Stockholder debts, Stockholder debt Student loans, Student Loans Suggestions for publication, Comments and suggestions. 2012 1040x T Tax attributes, reduction of Bankruptcy, Bankruptcy and Insolvency Insolvency, Bankruptcy and Insolvency Qualified farm indebtedness, Qualified Farm Indebtedness Qualified principal residence indebtedness, Qualified Principal Residence Indebtedness Qualified real property business indebtedness, Qualified Real Property Business Indebtedness Tax help, How To Get Tax Help TTY/TDD information, How To Get Tax Help Prev Up Home More Online Publications