The IRS system specializes in deep research and investigation regarding certain deductions on your taxes. The below records will need special attention as they are a red flag for the IRS:
- Meals and entertainment
- Out-of-town business travel
- Vehicle-related expenses
- Business gifts (know the differences between entertainment (business gifts) categorization and gift (donations).
- Home office expenses
Note: Keep all documentation and records for the claimed deductions above. Current technology allows us to keep records of all our receipts more easily. Many online services allow us to file, store, and scan documents. It all depends on your organizational needs. Do your research and explore your options. Detailed receipts matter and can save you thousands on IRS fines.
