Aside from my more than full time job I have a small lawn care business on the side. My question is: How do I claim expenses for things I don't have receipts for. I bought a mower on Craiglist this year and it was a cash deal. Can I just write up a receipt saying I bought XXXX mower for XX amount on XX date and use that for taxes? I took a small loan out to pay for it so I have bank records from that I could use as well.

This brings me to my second question: How do I deduct the mower as an expense? Do I have to take the full amount this year or can I use my monthly loan payments as the expense?

I'm trying to stay legal so Uncle Sam's IRS folks don't come down on me so any help is appreciated.

Engage a local CPA and pay for an hour or two of his/her time. Prepare for the meeting by making a list of as many questions as you can to improve the efficiency of the meeting. it will be money well spent.

You can expense for tax purposes any legitimate expense you have incurred, with or without a receipt. The issue is one of proof, and proof is only required if you are audited and proof is requested. You cannot "write a receipt", and if you try to fake a receipt you could be in big trouble. You can have other evidence besides a receipt, such as a printout of the craigslist ad. The bank loan documents may help, but don't show what you spent the money on. I'm not a tax professional, but I don't think you'd have a big problem with a mower that you are using in a lawn care business. You would need some evidence of the fair market value of the mower at the time you purchased it. In fact, you can expense items that you already owned if you have begun using them in the business.

The mower is an asset, and as such it should be depreciated, but you have the ability to choose accelerated depreciation and take it all up front, depending on the value of the mower.

Loan payments cannot be expensed, but the interest you are charged each year can be.

quote:

Engage a local CPA and pay for an hour or two of his/her time. Prepare for the meeting by making a list of as many questions as you can to improve the efficiency of the meeting. it will be money well spent.

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If you need to know the questions to ask post here, we can help with that part.

Your records need to be just that records. On the deduction you can take it all at once via sec. 179 ( limited by your earnings) or amortized over its IRS life per year. See IRS pub 946 for a bit of help.

You need a tax preparer, not advice from your invisible friends. Don't screw around with this.

^^^ Very much this...

You'll file a Schedule C for self employment - also an SE. There is a line for everything.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

Business cards, line 8

$0.54 per mile, line 9 (see page 2)

Interest on the mower, line 16b

Accountant / lawyer, line 17

Cell phone, line 25

The mower, line 39 or in Part V.

I've put $2,000 keyboards, Sawzalls, recording equipment, all kinds of stuff on Schedule C. Never had an issue. I assume it could last one year. If it lasts longer, great.

Keep a notebook or spread sheet (I use Numbers on a Mac). They ain't gonna care about your lawn care business. I report three Schedule C's, have not had a W2 in years.