Tax Audit Tips: Documents You'll Need to Stay Ahead

If the IRS doubts an expense you list on your tax returns, they'll ask for supporting documents. Many taxpayers e-mail me asking how they can get documentation for expenses for the IRS. Here's a quick refrence list:

How to get Documents for Common Allowable Expenses:


Rent/Mortgage: Show your monthly statement to the IRS. You can call your mortgage company or contact your land lord for this information.

Electric, Water/Sewer, Gas: Call your respective providers to obtain the statements for these expenses.

Prescriptions and Medical Equipment: Go to your pharmacy and ask for a print out.

Health and Life Insurance: Go to your payroll deparment at work and ask for a paystub or a Health Insurance prinout. If you aren't insured through work, call your insurance company and ask for a statement.

Day Care and/or Elderly Care: A Bank Statement will work if you're paying through debit or credit. Otherwise, request a letter from the care provider.

Alimony and Child Support: You can use pay stubs or divorce documents. Check with your lawyer on this.

Allowable Expenses: The list above covers all of the expenses the IRS will allow. Remember that credit card debt does not count as an allowable expense. If you owe the IRS, expect your credit account to fall into disrepair.

Get Organized: Lets face it, if you were organized, all of this information would be at hand, and you wouldn't have to frantically search for it when the IRS comes calling. I'm in the process of working on a FREE detailed tax and financial organizer that will be downloadable from the blog. Does anyone have any suggestions for this project? Let me know. And as always, feel free to send me an e-mail if you have more questions.