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What Documentation Do You Actually Need to Keep?
What you need to keep and what your CPA needs are different. Here’s the difference.
What your CPA needs
Your CPA is not reviewing your Augusta Rule implementation. They are taking what you give them and reporting it.
To file taxes they need:
- The total amount of rent paid
- Confidence that you have documentation to support it (not the documentation itself)
From there, they handle the 1099 (sometimes) and the deduction.
They are not asking for your comparables, your notes, or your agreements unless something is off. However, if you work with us, they can easily view these items if they want to confirm everything is in place.
What You Need to Keep
This is where most people fall short. It’s not that they don’t keep it, it’s that they usually don’t have it to begin with.
The IRS doesn’t care what you meant to do. They care about what you can prove you did.
This is the paper trail you need to have and keep for your records:
- Contemporaneous Rental Valuation Data
- Comparable venues in your market supporting how you arrived at your daily rent rate
- Rental Agreements
- Signed on or before the event date
- Proof of Payment
- Actual money transfer from the business to you on or before the event date
- Agendas + Contemporaneous Meeting Notes
- Showing real business purpose & activity
- Attendance Record
- List of attendees’ names
If you ever get audited, this is what gets reviewed. If you can’t produce it, your deductions are at risk (and you might even pay penalties).
How We Handle It (So You Don’t Have To)
The Augusta Rule is pretty simple, but the paperwork is more than most business owners want to deal with. We can help.
Our “Free Money” Plan handles most of this documentation for you:
- Rental valuation research
- Event schedule records
- Rental agreements
- Attendee lists
- Contemporaneous money transfer
All you need to do is take notes at your meetings.
At the end of the year, you download a tax packet that includes:
- Instructions and information for your Tax Professional
- All supporting documentation (for your records)
So when your CPA asks for numbers, you can send them at the click of a button.
And if you ever get audited, you have all the documentation on hand, along with our Audit Defense if you need it.
