ALIMONY PAYMENTS
____ Copy of divorce decree, separate maintenance decree, or
other instrument which specified the basis for alimony payments.
____ Current name, address, and Social Security number of
divorced or separated spouse.
____ Canceled checks or receipts to verify payments you made.
If alimony payments are not made directly by you, you may need
documents showing the source. For example, insurance
policy, endowment or annuity contract, etc.
BAD DEBTS
____ Verification of the debt such as a note or contract that
would establish a debtor-creditor relationship.
____ Full name and last known address of the debtor.
____ Evidence of your efforts to collect the debt.
____ Evidence of uncollectibility of the debt in the year
claimed.
BUSINESS USE OF HOME
____ Statement form your employer if you are required to provide
an office in your home or elsewhere.
____ Canceled checks or receipts verifying expenses incurred.
____ Verification of percentage of square footage of home used
for business to total square footage of home.
BUSINESS VS. NONBUSINESS ACTIVITY
____ Copies of tax returns for the 4 preceding years (6 years if
the activity involves horses) if you were engaged in the
activity during those periods.
____ If this is your first year for the activity, be prepared to
discuss:
1. Manner in which you carry on the activity;
2. Expertise of you or your consultants;
3. Expectations of the anticipated increase in value of business assets;
4. Success in carrying on other activities;
5. Elements of personal pleasure or recreation involved in carrying on the activity.
CAR AND TRUCK EXPENSES-SCHEDULE C OR F
____ Repair receipts, inspection slips, or any other records to
show total mileage driven for the year.
____ Log books and other records verifying the business mileage
claimed.
____ If you did not keep a log or other formal record of your
business mileage, reconstruct the business use of the
vehicle. This information should include current mileage reading on
the vehicle used for business purposes, mileage reading on the
vehicle when you acquired it, mileage reading for January 1
and December 31, and mileage distance between your residence and
your business activities during the year, if you kept one.
____ If you claimed actual expenses, you may have to provide paid
bills, invoices, and canceled checks for automobile expenses
you incurred during the year. These include gas, oil,
tires, repairs, insurance, interest, tags, and taxes.
CASUALTY LOSSES
____ Insured Property: A copy of insurance report showing date
and nature of loss or damage claimed, amount of damages claimed
on insurance, amount of coverage carried and the date and
amount of claim paid by insurance (or amount of claim pending);
____ Uninsured Property: Any fire or police department reports
on fire losses, theft losses, or losses from accidents.
____ Photographs showing extent of loss, if available.
____ Appraisal from a qualified estimator or adjuster showing fair
market value of the property before and after the casualty; or
an estimate of the damages.
____ Cost or other basis of property and date acquired.
____ Verification of actual cost of repairs.
COMMISSIONS OR CONTRACT LABOR
____ Copies of Forms 1099 for commissions paid.
____ If Forms 1099 were not issued to individuals who were paid
commissions, provide the names, addresses, and Social Security
numbers of the recipients.
____ Provide canceled checks or other records to verify the amount
paid to each individual.
CONTRIBUTIONS
____ Canceled checks and receipts for contributions to church or
charitable organizations.
____ If the contribution was other than money, show: (a) name and
address of the charitable organization; (b) items contributed;
(c) appraisal of the fair market value of each item on the
contribution date; (d) original cost.
____ If you reported expenses for attending a church convention or
similar activity, furnish a statement showing you were an
official representative of your church.
COST OF LIVESTOCK OR OTHER ITEMS BOUGHT FOR RESALE
____ Physical inventory sheets for both beginning and ending
inventory for the year and copies of Federal tax returns for
the year before and the year after the tax return year.
____ Canceled checks, receipts, and purchase journal or summaries
for goods purchased for resale.
____ Information or computation concerning cost of inventory items
that were withdrawn for personal use.
COST OF GOODS SOLD
____ Physical inventory sheets for both beginning and ending
inventory and copies of Federal tax returns for the year.
____ Canceled checks, receipts, and purchase journal or summaries
for goods purchased for resale.
____ Information or computation concerning cost of inventory items
that were withdrawn for personal use.
CREDIT FOR CHILD OR DEPENDENT CARE EXPENSES
____ If you are divorced or separated parent, you will need a copy
of the divorce decree or separation agreement, dates you had
custody of the child and dates the other parent had custody of
the child.
____ If you paid for care of a disabled dependent, you will need a
doctor's statement showing the dependent was physically or
mentally unable to care for self.
____ Names and addresses of persons or organizations you paid for
child care or for care of a disabled dependent. Copies of
canceled checks and receipts verifying costs.
____ If you do not have canceled checks, obtain statement from the
person or organization showing name, address, period of care,
and amount paid.
DEPLETION
____ Evidence of consideration paid and document showing legal
description of the property, kind of interest (that is, working
interest or royalty), and date of acquisition. If property was
inherited, copy of estate tax return or state inheritance tax
return showing value of the property.
____ Mineral purchaser's monthly statement showing amount paid you
and number barrels of oil or thousand cubic feet of gas
purchased. These statements should be for the months included
in the income tax return.
____ If you claimed cost depletion, you will need evidence to show
any increase in cost (above acquisition cost shown above),
records of previous depletion claimed, and supporting evidence
for figuring the depletion as claimed.
DEPRECIATION OF RENTAL PROPERTY
____ Evidence to verify ownership of property, date property
acquired, cost or other basis showing amount allocated to land
and to the building, cost of improvement, and additions to
property.
DEPRECIATION-SCHEDULE C OR F
____ Purchase invoices and receipts for assets
____ Copies of Forms W-2 for employees who were paid salaries or
wages.
LEGAL, TAX INVESTMENT COUNSEL FEES
____ Canceled checks, receipts, or statements showing amount of
payment and purpose of expense.
MACHINE HIRE OR CONTRACT LABOR - SCHEDULE F
____ Copies of all Forms 1099 for machine hire expenses paid.
____ If Forms 1099 were not issued to individuals who were paid for
machine work, provide the names, addresses, and Social Security
numbers of the recipients.
____ Provide canceled checks or other records verifying the amount
paid to each individual.
MEALS AND LODGING EXPENSES
____ Verification of the number of days away from home overnight for
business purposes.
____ Receipts or records for meals.
____ Receipts for lodging.
MEDICAL AND DENTAL EXPENSES
____ Insurance policies on which you deducted the cost of premiums
paid.
____ Itemized receipts for drugs and medicine showing the person for
whom the drugs and medicine were purchased. Canceled checks
alone are not acceptable.
____ Canceled checks, receipts, or statements for all medical and
dental expenses showing the person for whom each expense was
incurred.
____ Statement from insurance company showing any expense reimbursed
or paid directly by it.
____ Statement to show cost and medical requirement for special
equipment or education expense.
MISCELLANEOUS
You will need your records, including canceled checks, receipts,
explanations, etc., as appropriate, for the following items to be
covered during the examination of your return:
____ Supplies - Schedule C or F.
____ Utilities and Telephone Expenses.
____ Dues and Publications - Schedule C or F.
____ Legal and Professional - Schedule C or F.
____ Fertilizer, Lime, Chemicals - Schedule F.
____ Veterinary Fees, Medicine Expenses.
____ Advertising Expenses.
____ Land Clearing and Conservation Expenses.
____ Feed, Seed, Plant Purchased.
____ Earned Income Credit.
____ Self-Employment Tax.
____ Credit for Political Contribution.
MOVING EXPENSES
____ Canceled checks and receipts verifying amount of moving
expenses you paid.
____ Names and relationships to you of members of your household who
moved with you.
____ Computations showing number of miles by direct route form your
old residence to your new place of employment and to your old
place of employment.
____ Name and address of each employer you had since you moved to
new place of employment and period of time you were employed by
each.
____ Statement from your employer of the allowance or reimbursement
paid you for moving expenses showing amounts by kinds of
expense, such as plane or train fares, meals and lodging,
automobile expense, transportation of household and personal
property.
____ Closing statements on purchase and sale of personal residence.
Copies of lease agreement where applicable.
PENSION OF ANNUITY INCOME
____ Furnish records of the amount received for the year and what
part is excludable.
PENSION OR PROFIT SHARING PLANS-SCHEDULE C OR F
____ Canceled checks and other documents verifying contributions to
the plan for the year.
____ Copy of Form 5500-C or 5500-R, whichever is appropriate.
REAL ESTATE AND PERSONAL PROPERTY TAXES
____ Verification of legal ownership of the property.
____ Canceled checks and receipts for taxes paid; for example,
statement from mortgage company.
____ Identification of any special assessments deducted as taxes,
and an explanation of their purpose.
RENT ON FARM, PASTURE
____ Copies of leases or rental agreements, canceled checks, and
statements for rent paid or owed during the year.
RENT ON BUSINESS PROPERTY-SCHEDULE C OR F
____ Copies of leases or rental agreements, canceled checks, and
statements for rent paid or owed during the year.
RENTAL-VACATION HOME
____ If you own and rent a home or other dwelling unit that you also
use as a residence in the tax year, supply the following:
1. A dairy reflecting the number of days for personal use and the number of days for business use.
2. Records to verify rental income and rental expenses as well as depreciation claimed.
RENTAL INCOME AND EXPENSES
____ Records showing total of rent you received.
____ Canceled checks and receipts to verify all expenses claimed.
____ If any units were occupied rent free or below rental value
during the year, an explanation of the reason.
____ If the unit was used for personal reason, show the total number
of days rented and number of days used for personal purposes.
____ Evidence to verify ownership of property, date property was
acquired, cost or other basis showing amount allocated to land
and to buildings, cost of improvements and additions to
property. Include escrow papers and property tax bill for the
year of purchase.
____ If property was converted from a personal residence to rental
property, show date converted, and appraisal of fair market value
when converted.
REPAIRS-SCHEDULE C OR F
____ Canceled checks, receipts, and invoices for repairs.
____ For large repairs, description of the nature of the repair.
SALARY AND WAGES-SCHEDULE C
____ All four quarterly employment tax returns (Forms 940 and 941)
filed to support your deduction for salaries and wages paid to your
employees.
____ Copies of Forms W-4 for all your employees.
____ Copies of Forms W-2 for employees who were paid salaries or
wages.
SALE OF PERSONAL RESIDENCE
____ Closing statements for sales of the residence and for cost of
this residence when purchased.
____ Canceled checks and receipts for improvements made to the
residence sold.
____ Canceled checks and receipts for fixing-up expenses incurred
within 90 days of selling your residence (these expenses must have
been paid within 30 days after the sale).
____ If you replaced the residence that was sold, provide the
closing statement on purchase of the new residence.
____ If any part of your residence was used for business use prior
to the sale, you should have a copy of your income tax return
for the last year the home was used for business before the
sale.
SALES OF PROPERTY OTHER THAN STOCK
____ Closing statements on purchase of property.
____ Verification of capital improvements to property (receipts,
bills, contract).
____ You will need records showing terms and expenses of sale, and
copy of closing or settlement sheet.
____ If sale involved rental or business property, you should have
copies of your income tax returns for the 2 years before the
year of sale.
____ If you reported gain or loss from repossession you should have
a copy of your income tax return for the year or the original
sale, all contracts or legal documents involved, and
verification of repossession costs.
SALES TAXES
____ Receipts for sales taxes paid on a car, motorcycle, motor home,
truck, boat, airplane, home (including mobile or
prefabricated), or building materials you bought to build a new
home.
____ If you used actual receipts to compute your sales tax, you will
need verification of all purchases on which sales tax was paid.
SCHEDULE C (OR F)-GENERAL
____ All books, journals, ledgers, and worshipers used in preparing
your return.
____ All bank statements and canceled checks (both business and
personal) for the 14-month period from December through January
of the following tax year.
____ Records of all savings and invested funds for the year.
____ Records of all business and personal loan activity (proceeds
and payments).
____ Purchase invoices or closing statements covering acquisition
and disposition of capital items (business and personal). This
includes real estate, automobiles, machinery, and equipment.
____ Information on any nontaxable income received, including but
not limited to Social Security benefits, gifts, and
inheritances.
____ Copies of your four most recent Forms 941 and related W-4's.
SCHOLARSHIP OR FELLOWSHIP GRANT
____ A statement from the grantor of your scholarship or grant
showing the following:
1. Funds from which grant was paid.
2. Amount of grant and period covered.
3. Requirements of grant including any present, past, or future obligations or services. (Are all candidates for the degree you're working toward required to perform these services?)
4. Fringe benefits you derived (medial insurance, awards, bonuses, etc.).
5. Benefits derived by grantor.
6. Selection criteria for recipients.
____ Current transcript of credits for degree.
____ University bulletin outlining degree requirements.
____ A copy of the official instrument establishing the
scholarship or fellowship program.
STATE AND LOCAL INCOME TAXES
____ Copies of state and local income tax returns for any of the 3
previous years.
____ Copy of Federal income tax return for any of the 3 previous
years.
____ Canceled checks and receipts showing taxes paid.
STATE INCOME TAX REFUND
____ Furnish a copy of your Federal income tax return for any of the
3 previous years.
____ Furnish a copy of your state income tax return for any of the 3
previous years.
STOCK SALES
____ Brokerage vouchers establishing the purchase price, sales
price, and dates of transactions.
____ If you sold securities on which you had a return of capital you
will need records showing the nontaxable distributions received
during the holding period.
____ If you claim worthless securities, you will need verification of
dissolution or liquidation and liquidation distribution.
TRAVEL-EMPLOYEE BUSINESS EXPENSES
____ Furnish a log or diary for travel costs incurred while away
from home on business. This information should include
transportation tickets, receipts, and canceled checks, etc.
TRAVEL AND ENTERTAINMENT EXPENSES
____ A log or diary for travel costs incurred while away from. home on
business. This information should include transportation
tickets, receipts, and canceled checks.
____ Records and receipts for entertainment expenses you claimed.
These records must show the names and business relationship of
the person(s) entertained, purpose of the entertainment, place
where the entertainment took place, date of the entertainment,
and amount of the expenditure.
____ If you claimed expenses for maintaining an entertainment
facility, provide records showing the total use and business
use of the facility, and expenses incurred, in addition to the
information required above.
____ If you claimed expenses for business gifts, provide records and
receipts showing cost of the gifts, persons to whom the business
gifts were made, and their business relationship.
TRAVEL EXPENSES-MISCELLANEOUS DEDUCTIONS
____ Furnish a log diary for travel costs incurred while away from
home on business. This information should include
transportation tickets, receipts, and canceled checks, etc.
UNIFORMS, EQUIPMENT, AND TOOLS
____ Explanation of how expense related to your employment including
a description of the uniform.
____ Statement from your employer that the expense was required,
reimbursement policy, and amount reimbursed or allowance paid.
____ Canceled checks and receipts verifying the expense.
© 1986, 1998 to 2002, Jack Warren Wade, Jr.
