Documentation 101: How to Prepare for an IRS Audit

Documentation 101: How to Prepare for an IRS Audit  You claimed the deduction. But if the IRS asks, can you prove it? Mike Jesowshek, CPA, explains which records you need to support your business expenses. Learn how to document purchases, keep clean books, and organize your receipts so you’re prepared if the IRS comes knocking. **👉Find out how much your business could save in taxes.** **TaxSavingsPodcast.com/scorecard**  **🚀 Book your free demo call today. Click here or visit:** https://taxelm.com/demo/ **Chapters:**  **00:00 Your Tax Deductions Need Documentation** Paying with a business card doesn’t automatically make a purchase deductible. You need records showing what you bought and why it was business related. **03:00 Audit Selection vs. Audit Outcome** Even well-organized businesses can get audited. Good documentation helps you support your deductions if you’re selected. **08:00 The Proof Behind a Business Deduction** Every deduction needs an actual transaction, a business purpose, and the correct tax treatment. Your supporting records should match. **12:00 Clean Books and Separate Bank Accounts** Separate business and personal accounts, update your books regularly, and clearly label expenses, transfers, and owner activity. **14:00 Business Structure, Payroll, and Reimbursements** Your tax filings and records should match your business structure. Payroll, accountable plans, and meeting records need proper implementation. **17:00 What to Record Beyond the Receipt** Document the business purpose and who was involved. Supporting invoices, calendar entries, and emails can help explain the expense. **19:00 Supporting Records for Mileage, Travel, and More** Mileage, travel, equipment, contractors, loans, and reimbursements each need records that support the transaction. **20:00 Building an Audit-Ready Workflow** Capture receipts promptly, add context, categorize expenses consistently, and save your documents digitally. **22:00 Testing Whether You Can Find Your Records** Choose an older transaction or five large expenses. Check whether you can quickly find the records supporting them. **23:00 What to Do When an Audit Letter Arrives** Read the request carefully, meet deadlines, organize your response, and speak with a qualified tax professional. **25:00 How Good Documentation Pays Off** Organized records make audit responses faster and deductions easier to defend. Clean books also help you make business decisions. **27:00 Why Tax Strategies Need a Paper Trail** Putting a strategy into practice includes documenting it. Hiring your kids, for example, requires records of their work and payments**.** **28:00 Key Takeaways and Next Steps** Clean books and timely documentation help you prepare for an audit. Learn where to find support implementing tax strategies. **Podcast Host:** **Mike Jesowshek, CPA – Founder and Host of *Small Business Tax Savings Podcast*** **Join TaxElm:** https://taxelm.com **🚀 Visit:**  https://www.TaxSavingsPodcast.com  **🚀 Check Out TaxElm:** https://taxelm.com/ **🚀 Join our Free Facebook Group:** https://www.facebook.com/groups/taxsavings/ **🚀 YouTube:** www.TaxSavingsTV.com **👋🏼 GET IN TOUCH** **You can Tweet @MJesowshek with any feedback, ideas, or thoughts about the lessons you've learned from the episodes. We want to thank you personally for tuning in 🙏** **🙌LEAVE A REVIEW** **If you enjoy the podcast, please leave a 5-star review on Apple Podcasts or Spotify—it helps more business owners find the show ⭐**