Can you claims tax credit for cash expenses?

Question

I read somewhere that you should save all the receipts that you paid with cash, make a list of tips, tolls, anything paid in cash to claim it at the end of the year to IRS. I have never done that before. Is that true?

Answer 1

Absolutely. Just because you paid something with cash doesn't make in non-deductible, just difficult to keep track of. You need to have flawless records to use cash deductions, though. You can generally get receipts for tolls if you go through the manual lanes, or if you live in a state that has some sort of electronic tollway device that you put in your car, that would be a better alternative than paying cash.

The IRS doesn't like to see cash payments, but sometimes they are necessary. Just keep it to a minimum.

Answer 2

I read the same article and it was written a bit misleading.

PALADIN is correct when he says that these expenses must be "business" expenses and not personal expense. Driving back and forth to work is a personal expense.

I really hate these articles sometimes. They seem to forget that what they are writing applies to only a small percentage of people.

Answer 3

It is if they were "business" expenses not reimbursed by your employer.
"Personal" expenses are not eligible for a tax deduction.