26/05/2026
❓ Tax Question:
“I don’t have receipts for my purchases and expenses, and I’m using itemized deductions. What possible issues could this cause?”
📌 Answer:
The biggest risk is that the BIR may disallow all your deductions during a tax audit.
Under Section 34(A)(1)(b) of the Tax Code, every business expense must be backed by proper documentation. Simply listing expenses is not enough—the law requires official proof such as:
💡 Primary Proof – Invoices
✔ Must be BIR‑registered
✔ Show your business name, TIN, date, and description of goods/services
✔ As updated by the Ease of Paying Taxes Act, invoices are now the main evidence of transactions
💡 Other Acceptable Records (if invoices unavailable):
Contracts/Deeds (e.g., lease contracts, employment contracts)
Payslips & Payroll Sheets (proof of wages)
Bank Statements & Canceled Checks (evidence of payments)
Billing Statements (utilities, internet, etc., under your business name)
👉 Documents must clearly show:
✔ Exact expense amount
✔ Direct connection to your business operations
💼 At Santos & Garcia Business Consultancy Services, we guide entrepreneurs in proper documentation so deductions remain valid and protected during audits.
📩 [email protected]
📞 09084910445
