Just at the beginning of this year, I started a business (not fully, but I've started doing jobs for it). Up until March, when I did my personal taxes, I had no idea what kinds of things I could write off... Until I talked to an accountant and received a form stating that I can write off a percentage of nearly everything.
My question is, if I don't have any receipts from January to almost April, can I use bank statements and monthly bills in place of receipts? And if so, do auditors frown on that?
Also, I'm in Canada, and I've never had to deal with something like this before... The only receipts I ever keep are for warranty, and I always throw them out after the warranty expires.
EDIT: According to the link provided by mbhunter, it is possible to do it through bank statements, but auditors may still ask for receipts. It seems a best practice is to open a free bank account, and use that for all your business income and spending. As well as keeping those records (easier for you when tax time rolls around), you should also keep all receipts, and write exactly what the purchase was on the back of them.
A quote from the link:
The consequences of not having receipts for an audit are simple ... no receipt - no deduction.