What a Bank Statement Actually Proves
What the IRS Actually Requires
- Amount: How much was spent (the receipt helps here)
- Date: When the expense occurred
- Place or description: Where you were or what was purchased
- Business purpose: Why this was necessary for your business
- Business relationship: Who was present, the name and business relationship of any clients, customers, or business associates
What You Should Keep
- The receipt or invoice, even a photo of a paper receipt saved to your phone counts
- A note of the business purpose, written at the time of the expense (this is called a contemporaneous record)
- Names of people present, for meals and entertainment, note who you were with and their relationship to your business
- For travel, destination, business purpose of the trip, and dates traveled (or meeting minutes)
What to Provide If You’re Ever Audited
- Original receipts or invoices for the expenses in question
- Bank and credit card statements (to corroborate amounts)
- A mileage log if you’re claiming vehicle use (date, destination, business purpose, miles)
- A calendar or appointment records showing meetings with clients
- Any contracts, proposals, or email correspondence that supports the business purpose
- Contemporaneous notes, written at the time, not reconstructed later