The best way to keep certain daily expenses and certain income for filing your tax return is to keep logs. Logs along with official receipts are also some of your best defenses if you are selected for an IRS audit.
Logs of expenses and income can be kept using simple notebooks or as notations in a daily calendar or diary.
Here are some of the logs you should keep:
If you work at a job that involves tip income you should have a daily log of cash tips, tips left on credit card payments, and tips you receive as part of an employee pool.
If you gamble you should have a log of your daily wins and losses, and receipts from ATMs and those W2Gs you receive for jackpots. Remember your losses can be used to offset those jackpot wins. Keep track of the casinos and the dates. By the way, that casino log will give you an up-to-date reminder about how your blackjack card counting is working — or isn’t working, and if that Roulette system was really worth the $49 you paid for it.
If you use your car for work or to look for a job you need a log to track your mileage. You also want a record of your mileage driving to doctors and pharmacies and hospitals.
If you drive for a charity, keep a log. If you drive to donate merchandise, keep a log.
Note the date, time, reason, odometer readings, and purpose in your car logs. The time spent doing this is worthwhile because gas prices are high and the IRS has increased the value of mileage deductions for 2022.
I find that keeping an envelope to hold receipts along with your notebook or notebooks makes record keeping easier.
If you have business expenses, keep a log.
If you buy tools for work, keep a log.
If you have expenses regarding your investments such as buying investing magazines, keep a log.
Logs are best kept when your boss or a business doesn’t keep track of details for you.
Sure, a casino will give you a win/loss statement every year — but if you’re audited by the IRS it’s better to have your log because that win/loss statement from the casino might not be accurate.
And remember, the cost of buying notebooks or diaries for your logs are tax-deductible expenses for tax preparation.
And what’s better than a tax-deductible expense? How about a free consultation from Legal Tax Defense. If you have any tax issues call now to speak to a tax attorney for free. Also, go to their website www.LegalTaxDefense.com for more free information.
Disclaimer: Alan Mendelson is a well-known TV consumer news reporter who reports on tax issues. You should seek professional advice if you have tax questions or issues.