DOCUMENTATION FRIEND OR FOE?
Documentation friend or foe? In the world of taxation documentation is your greatest friend. Federal and state copies of W2 information, bank and investments interest and dividend information, healthcare coverage and premium information, pension and retirement information, business income statements and balance sheets and social security payment information are just a few of the actual documents that go into the preparation of an accurate return. The more documentation the better your protection and accuracy of your return.
An area I always am asked is, “What is the standard donation amount I can take as an itemized deduction?” There is no standard amount. Without the proper documentation you can’t take anything. The same is true for non-cash donations as well. You will not find your donation amount nor will you find the business miles you drove your automobile on my ceiling. I laugh to myself sometimes when business mileage is listed at an even thousand miles when given to me in an interview or written notes. We live in a world of smart phones and apps that can track our calendars complete with apps that let you make notes on the business purpose of travel. These tools are your friend and when it comes to a question from the IRS documentation will WIN THE DAY!