Are your receipts too faint to read? This is a common problem with the thermal paper receipts that many restaurants use. Over time the images disappear, and if you leave them in the sun, you can almost watch the ink leave the thermal paper. Protect yourself.

You need to scan or photocopy the thermal paper receipts to protect your proof. If the scan is going to be your proof, make sure before you scan that you note on the receipt

1. who you entertained, and
2. why you entertained this person or these people. (In this short notation, try to use seven words or fewer to capture the ministry benefit hoped for or achieved with the entertainment.)

The receipt will show the remaining information that the law requires, including the

1. date of the entertainment,
2. where the entertainment took place,
3. what the entertainment involved (food, drink, movies, golf, etc.), 
4. the amount you spent on the entertainment.

If you photocopy the receipt, make the note on the photocopy so that over time you can tell that the notations of the ministry purpose were made some time ago, such as near the time the expense was incurred.

If you make your entries in a tax diary, you still need to protect the receipts with either a scan or a photocopy.

If you don’t need a receipt because the expense is under $75 you still need the date, who, where, what, and why as you had in the proof above. 

When documenting entertainment, keep these rules in mind:

  • Your credit card statement or canceled check proves that you paid the money.
  • Your receipts show what you bought.

Example. You hold a ministry meeting at the local restaurant. Your credit card statement shows a charge of $159.31. What does that prove?

  • The credit card statement proves only that you spent the money.
  • The receipt discloses what you bought. Some stores have the option to purchase food, clothing, etc.

Your tax-proving strategy needs to include receipts. Make sure you

  • obtain them,
  • protect them with a scan or a photocopy if necessary, and
  • capture who and what purposse
  • keep them.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

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