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    MeMac's Avatar
    MeMac Posts: 2, Reputation: 1
    New Member
     
    #1

    Nov 29, 2008, 10:15 PM
    Business Receipts Lost in Fire
    I have a friend who has her own hair stylist business out of her home. Last year she had a fire and lost all her business receipts. When she goes to do her income tax return how can she claim certain business expenses without the receipts? She is trying to contact all the companies she purchased products from (sometimes she pays in cash so she does not have a check or credit card receipt) to see if they have records. Other than that can she estimate her expenses based on what she usually has? Her business does not decrease or increase much from year to year.
    Thanks,
    Mac
    ATYOURSERVICE's Avatar
    ATYOURSERVICE Posts: 246, Reputation: 13
    Full Member
     
    #2

    Nov 30, 2008, 02:19 AM

    Receipts are used to make calculations or estimate to her business expenses. They are only required to be presented if she gets audited.

    She should speak to her tax preparer. They should not charge her for the consult.
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
     
    #3

    Dec 1, 2008, 04:20 AM

    Go through your bank statements, canceled checks, credit card statements and other records to collect as much information as you can. Keep a copy of police report with you.

    If you do not have complete records to prove an element of an expense, then you can prove the element with:
    *Your own written or oral statement, containing specific information about the element, and
    *Other supporting evidence that is sufficient to establish the element.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
     
    #4

    Dec 1, 2008, 10:05 AM
    The IRS can and will accept estimates of business expenses, as long as they are reasonable and normal for the business in questions.

    Her tax preparer should know this and be able to help her make thee estimates based on the previous years tax returns.

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