Is a credit card statement considered a viable replacement of a receipt for income tax documentation of expenses or are credit card slips still required?

WiseSaver
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Aug 17, 2011 by WiseSaver
Category: Tax Planning

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Kerry Freeman EA
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Advisor: Kerry Freeman EA, IRS Tax Relief
Aug 19, 2011  
I think that we can agree that the Best source will be the receipt. However, I believe that during audit or appeals you sometimes get the wiggle room and statements and Credit card receipts has giving some allowance. But do not put your hope in this, Trends would have to be made and with some statements the argument can be made.

Example: The Credit card statement say $125.00 to California Real Estate board, If the person is a licensed RE then it is not to hard to use this to demonstrate the expense for their license and might be accepted.

It all is a case by case bases.
Marilyn K Ratliff, EA
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Advisor: Marilyn K Ratliff, EA, Tax Planning
Aug 19, 2011  
NO, the credit card shows that you paid for something and who you paid but even the slip does not work unless it is itemized. You must have an invoice showing what you purchased and the date.
Kerry Freeman EA
0 Votes
Advisor: Kerry Freeman EA, IRS Tax Relief
Aug 18, 2011  
Bruce, great rewrite, good info. How is it going on getting ready for RTRP test? Good luck and keep up the good work.
Bruce McFarland
3 Votes
Advisor: Bruce McFarland, Tax Planning
Aug 18, 2011  
No, it is not. For a more indepth answer please veiw the guest post Are Credit Card Statements Sufficient Documentation for the IRS? http://themotaxguy.com/sufficient-documentation
Kerry Freeman EA
2 Votes
Advisor: Kerry Freeman EA, IRS Tax Relief
Aug 18, 2011  
The gold standard is the reciept, not even the credit card slip. Since the reciept has information as to what was purchased. The next useable proof is the statement,however this does not tell you what was purchased and as the taxpayer you have the burden of proof.

Example, you visit staples and purchase a $1000 computer, without the receipt the statement will only say staples$1000. How can you prove that you got a computer or $1000 in gift cards and gave them to family for Christmas (Yes this has been done).

Best practice is to keep every receipt.
Linard Williams
2 Votes
Linard Williams
Aug 18, 2011  
I really would need more information on what the deduction is for.

However, basically that statement could pass.

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