How you can recreate missing receipts for tax deductions
Q. I had a fire in my house and I don’t have all my receipts for the year. I’ve been able to get copies of some, but not all. When it comes time to file my taxes, what happens to all the deductions I was planning to take?
— Safe but lost some
A. We’re glad that you’re safe, and you’re smart to be cautious.
It is true that the IRS requires that you maintain proper documentation for tax deductions claimed, said Cynthia Fusillo, a certified public accountant with Lassus Wherley in New Providence.
“You’ve probably heard that you should not throw away such documentation for a number of years following the filing of a particular tax return,” Fusillo said. “However, sometimes real life gets in the way and retaining records is just not possible.”
Some receipts should be relatively simple to recreate, such as your real estate taxes and mortgage interest, Fusillo said. You can contact the tax collector’s office in your town for the tax information, and your lender or mortgage servicing agent can easily provide you with a year-end statement of mortgage interest paid, usually Form 1098.
Charitable contributions may take a little more work to substantiate.
“For donations of $250 or more each, recipient organizations are required to acknowledge the gift by letter,” Fusillo said. “You could call those organizations in this category, explain your situation and request a duplicate acknowledgment letter.”
If you made donations of less than $250 each, your bank should be able to provide copies of canceled checks, assuming those were destroyed in the fire as well. Hopefully you won’t be charged a duplicating fee once you explain what happened, she said.
Your insurance companies can also help, said Alison Williams, a certified financial planner with Stonegate Wealth Management in Oakland.
“Your health insurance company can provide records for your medical claims,” Williams said. “Your home insurance company can provide any information you need for residence-related deductions.”
Your bank, brokerage house or mutual fund company should be able to provide copies of your transactions and trading expenses.
Other miscellaneous expenses may be relevant to you as well, and that’s where your credit card statements can help.
Business and entertainment expenses may show up there, so call your credit card company and request those duplicate statements, Fusillo said.
She said mileage logs would need to be recreated by you if this is something you deduct. In the event that your deductions are similar from one year to the next, she said, use your most previous years returns as a guide when you sit down to recreate.
Your return from last year can be used as a guide for all your deductions.
“Finally, and only if your return is audited, sometimes your written or oral testimony can be used to verify deductions taken,” Fusillo said. “If you’ve made your best effort to recreate and obtain replacement documentation you should be fine.”