tlp1234
Moderator
Exactly right!'it is only an issue if you get audited… and the 87000 agents are on,y going after the millionaires and billionaires
in all seriousness… being a CPA, I’ve always saved receipts on everything, so this isn’t an issue for me. There really isn’t a change in the law. You always had a legal requirement to report any gain . The 1099 just provides them an enforcement mechanism. You could find $100 on the ground and you are legally required to report it on your tax return… but who would ever know.
I've been doing the lo-tech thing of a monthly envelope of paper receipts with each receipt identified for what it's for, dated, and chronologically filed in each envelope, each envelope titled "Expenses, Month, Year". Also a concurrent Excel spreadsheet with each month of the year under tab. A tab/sheet at the end that I've put the simple formulas in that adds everything by month, and then finally totalled for the year. Each tabbed sheet further categorized, business vehicle milage, fuel, business meals, tools, accounting services, uniforms, dry cleaning, utilities etc...etc. Allowed business deductions seem to change a little (sometimes a lot) over the years. But I log all expenses whether deductible or not!
Rinse/repeat for every year.
At tax time, I print off that categorized, totalled sheet and give it to my accountant with my 1099's and everything else required. He goes over it all with me telling me what I can legally deduct. We review, discuss, he files it electronically, I pay taxes owed electronically......done. I have a neat binder for every year with copies of everything for posterity. You never know when an IRS audit will be upon you.
Once you get into the habit, and maintain it, it becomes second nature. Complete as you go, and don't put it off. I reconcile all me expenses every day this way. Have for over 20yrs, even before I had my own business. I'm sure there are better, more modern ways to do this. But I've been doing this so long this way and doesn't cost me anymore than my time to do it.
I know a few lazy fuckers with businesses that just haphazardly throw all this shit in a few envelopes and a box, and give it to their accountant this way. I've wondered if these clods are lying to me, or their accountants even accept it this way and charge them accordingly for being lazy, sloppy ass record keepers. I know if I was an accountant, I'd tell a dumbass like that to shove that box of shit up their ass.
As far as the new IRS army, when the hell has anyone seen US gov roll out anything major like this on time, or maybe even at all since we'll have a 2023 Republican House that might kill/alter funding for it? Remember what a fiasco the Obamacare health insurance market place website was.
