Taxpayers must keep thorough records to support their deductions from "summary" of Income Tax Fundamentals 2021 by Gerald E. Whittenburg,Martha Altus-Buller,Steven Gill
To ensure accuracy and compliance with tax laws, taxpayers are required to maintain detailed documentation to substantiate their claimed deductions. This includes keeping records such as receipts, invoices, canceled checks, and bank statements that clearly demonstrate the expenses incurred. Without proper documentation, deductions may be disallowed by the IRS upon audit. Thorough record-keeping is essential for various types of deductions, such as those related to business expenses, charitable contributions, and medical costs. For business expenses, taxpayers must retain documentation showing the nature of the expense, the amount spent, the date of the expenditure, and the business purpose. This information is crucial in proving the legitimacy of the deduction and ensuring it meets the necessary criteria. Similarly, for charitable contributions, taxpayers must keep records of donations made, including receipts from the charitable organiz...
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