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Employee
March 30, 2024
Question

Cash withdrawal from biz acct has expense

  • March 30, 2024
  • 2 replies
  • 0 views

I withdrew cash from my business account to pay for expenses. Other than that I don’t have receipts.

can deduct those as expenses since money withdrew from business account.

2 replies

VolvoGirl
Employee
March 30, 2024

Yes if they were for business expenses.  Doesn't matter how you paid a business expense.  But you really should have receipts or something for backup if the IRS ever asks about it.   You need to be keeping good records.  Like use a program like Quicken or QuickBooks.  

March 30, 2024

Yes, you can deduct ordinary and necessary business expenses you paid with cash.  You must make notes about what you did with the cash and the nature of the expenses.  It's not a good practice to do on a regular basis for the reasons you cited.  No receipts or proof of expense so in the future you can create a receipt and have the person sign it. Buying anything for business at a business establishment should provide you with a receipt in almost any situation when using cash.  In those situations you can write on the receipt the purpose.

 

Enter those expenses in your business schedule when you prepare your return.

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