Business expenses and expenses for producing income
Expenses related to your business income from self-employment or as a sole proprietor will probably be part of the accounts payable cycle of your business accounting system and record-keeping. If you have expenses related to investments or income-producing property, such as rental property, and you don’t have a formal accounting system, you will need to set up a way to keep track of them. In general terms, documentation of these expenses should include:
Requisitions
Quotations and bids
Purchase orders
Maintenance or service requests
Receiving documents or proof of delivery
Invoices
Payment vouchers
Canceled checks
Credit card statements
Bank statements
If you have a home-based business, you will need to keep records to support your deduction for the allocated portion of your household expenses that correspond to the business use of your home. This documentation includes:
Rent receipts if you are renting your home
Depreciation calculations if you own your home
Utility bills
Personal expenses
Adjustments to income
Receipts for educator expenses – books, supplies, and materials used in the classroom
Form 5498 - IRA Contribution Information
Form 1098-E - Student Loan Interest Statement
Form 1098-T - Tuition Payments Statement
Documentation of contributions to a Health Savings Account
Receipts for moving expenses – travel expenses for you and your family, and costs of transporting your household goods and personal effects
Payment vouchers for a self-employed health insurance plan
Payment vouchers for contributions to a self-employed SEP, SIMPLE, or other qualified pension plan