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Checklist for acceptable proof of business losses

What you need to reply quickly and completely to your letter using our Respond to Department Notice online service:

  • a digital copy—scanned or uploaded from your phone—of the documentation below, and
  • an Individual Online Services account. (Log in or create an account.)

Documentation required to report business losses

You must provide all of the followingNotes
checkbox image copy of your Schedule C, Profit or Loss from Business, from your federal income tax return for the tax year noted on your letter

 

checkbox image any license, registration, or certification that you need for your business Examples include credentials for taxicab drivers, cosmetologists, and health- and food-service workers.
checkbox image summary documents that you used to calculate the income and expenses that you reported on your tax return These documents must cover the entire year and may include:
  • general ledgers (if you do not have a ledger, include at least 6 months of receipts)
  • spreadsheets
  • income and expense journals (include a statement explaining why the claimed expenses relate to the business income)
  • travel log or mileage statement, if applicable
checkbox image any Forms 1099-MISC you have received
checkbox detailed documentation, such as sales slips, invoices, bank statements, or receipts supporting your business income and expenses Send copies of the actual documents from the time you earned the money or incurred the expense; estimates are not acceptable.

Also send:

  • receipts
  • canceled checks
  • bank statements (preferably, business account statements)
    • Bank statements are only accepted in conjunction with the corresponding receipts or other supporting documentation.
    • If the bank account is also available for your personal use, you must mark the business-related deposits and expenses.
checkbox image Form 8829, if you are claiming business use of your home You must include documentation that supports the basis for your calculations.
checkbox image questionnaire you received with your letter You must complete all questions.

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