Originally Posted By Ardenner:
It is really infrequent that individuals are audited unless you have a really high net worth or have a very irregular tax situation (more so than ever now). All the returns are analyzed by a computer and ones found to irregular are reviewed by real people. I'm still in business school (1 year left), but I believe that for any thing you are going to expense you need to have a receipt or invoice of some sort. I could be wrong though, while I have had an accounting class every semester I have the first tax accounting course next semester. My limited tax knowledge is really more pertinent to publicly traded corporations.
OR have an erratic income. Such folks on commission. When I was making pretty good money, my income would go from $15K one month to $80.00 the next. Every year I use to get an audit. Basically sent a letter saying we think you owe this much because..... If not show us proof.
Beetle, If you used your debit card and the charge show the place of business. Bank statement will suffice. Same with cancelled checks. PERSONAL EXPERIENCE. Also from this experience, I;ve learned to keep receipts, statements, brokerage confirms for 3yrs.
Over the past 2 yrs, I have not made jack shit. So for now I am good.