Purchases

• Retain all receipts for business related purchases. When you purchase items online, retain the packing list or invoice included within the package. Verify that the purchase price of each item is listed as well as the date of purchase. If these details are not listed, visit the website from which you purchased the items and print a copy of your invoice to retain with the packing list.
  
  

Payments

• For all cash, credit or check payments made for tax-deductible goods or services, retain proof of payment. Utility bills, car payments, and rent or mortgage payments do not generate a cash register receipt, so you must save the original billing statement for these items. If you pay the bill with a check, save the bank statement that shows the payment. For cash transactions, request a written receipt. Credit card payments are also itemized on your monthly bill. Save this with your tax files.
  
  

Business Use of Home

• Independent contractors are eligible for deductions based on business use of the home. If you qualify for this deduction based on the IRS requirement that states, "you use part of your home exclusively and regularly for business," you must retain documents that state the overall size of your home and specify the amount of square footage dedicated to your business. Maintain copies of receipts, invoices and bank statements that support all expenditures related to your home.
  
  

Business Use of a Vehichle

• If you use your personal vehicle for business or maintain a vehicle for dedicated business use, you can claim a deduction for this. Keep a strict mileage log that proves your usage. Write down the date and include beginning and ending odometer readings for each trip made in the vehicle. Retain receipts that support expenses such as fuel purchases, insurance payments, oil changes and other types of routine maintenance.
  
  

Travel, Entertainment and Gifts

• When you travel, you must establish that the trip was business related, log why the trip was necessary and explain the gain expected. Retain individual receipts for each expense such as hotel costs, meal costs and transportation. For entertainment and gift expenses, you must also keep your receipts and explain the business related purpose for the expenditure as well as the business relationship with the recipient.