Saturday, February 10, 2007

Recordkeeping for small cash purchases

June --

I have a small home business selling used books on Amazon. Most of the book sales I buy from do not give receipts and accept cash only. Also, I pick up books at yard sales, etc where I also pay cash and have no receipt. If the amount is over $50 I usually pay by check and use my cancelled check as proof. I always keep a dated log showing what I purchased, where and the cost and mileage. Is that enough proof for the IRS for small cash purchases (under $50)?

Maureen from Pennsylvania

Maureen, you are doing exactly what you need to do. A log of purchases will work. And if the people selling won't give a receipt or accept a check, and the expense is a large one, just write down the book titles and / or authors. You're showing a "businesslike" method and that's what the IRS likes.

-- June

For recordkeeping how-to check out: The Confident Indie: Five Easy Steps

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