Why Statements Aren’t Enough

There’s a common misconception that credit card statements alone are enough to prove business expenses to the IRS.

Spoiler alert: They’re not.

✅ What the IRS Actually Requires:

To deduct a business expense, you need to be able to prove:

• What was purchased

• Why it was a legitimate business expense

• How it directly relates to your business activity

💡 Why Receipts Matter

Here’s a real-life example: An employee once tried to deduct a strip club visit as a business meal—because the credit card company had coded the venue as a “restaurant.” That’s not something you want to explain to an auditor.

📌 Best Practices to Stay Audit-Proof:

• Reconcile your bank and credit card statements monthly

• Match and retain receipts for each transaction

• Keep your documentation organized and accessible for at least 7 years

While your bank statement shows that you spent money, only the receipt tells the full story. When in doubt, save the receipt—your future self (and your tax preparer) will thank you.

Need help setting up a better recordkeeping system? I’ve got tools and tips to make it easier.