Only invoices work for tax deductions?

Question

Is it true that if I wanted to write off an expense I have to have an invoice?

I’ve always used the receipts that the handymen give me or my bank statements.

Someone told me that the irs won’t accept that as a documentation because it has to be an invoice. Is it true?

Natalie Kolodij · Answer

Just to elaborate on what other pros noted

You don't technically need either for something to be deductible

But if Audited- you have to prove:

- Something what was necessarily business epense

-You paid that  expense

Of the two I'd almost say Invoice > receipt. A receipt shows payment but you can also get that from your bank/credit card statement.

An invoice shows what you bought - you can't get that anywhere else (depenidng on the company).

Linda Weygant · Answer

Technically speaking, you don't have to have the invoice or receipt to take the deduction.

HOWEVER,

In the event of an audit, anything that you don't have an invoice or receipt for (credit card statements don't count) will likely be disallowed by the auditor, effectively making it non deductible.

Online storage space is cheap.  Scan your paper and keep it stored.  You can toss/shred the original.

Ashish Acharya · Answer

You need an invoice to prove the expense is business related and payment proof to show that you actually paid it. If not, people would just generate invoices and take deductions without payments.

Bill B. · Answer

A receipt is an invoice.

Do you have a completed w9 from the handyman assuming they do more than $600/year worth of work.

Worse case you get audited and you have the handyman provide you with an invoice. This is why you want the w9 so they know they have to report the taxable income on their end.

Mary Jay · Answer

Thank you all guys!!!

I really appreciate all of your help!!!

Vicki X. · Answer

Also, the rule of thumb is to keep all receipts with the amount equals to or above $75 (not tax advice).

Only invoices work for tax deductions?

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