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Hi on our hit list of formalities and by the way I'm Lee Phillips and were talking about formalities of an LLC or a corporation 23 is having your allows to hear your corporation adopted an official form for reimbursement or for expenses that meets the IRS criteria well as a matter of fact there is no such form don't worry about it, but you do need a form and mine takes the form of a simple piece of paper, but I always write down at the top what it is what I'm doing where I why I'm going to this place and everything else for expenses when I go on the road however whenever you're reimbursed you need to establish one was it ordinary and necessary is this something that your business your type of business needs and two is it reasonable you know I don't need a Porsche to drive around in my business, but I do need to buy an airline ticket I do need a hotel and I do need all of these things and yes I can stay in a nice hotel versus the motel 6 I don't have to stay in the motel 6 that's my choice and the IRS has to recognize my choice however do I get a private plane instead of an airline ticket yeah some speakers actually do, but I think you need to establish that the standard airline couldn't get you there or that there was some reason is it reasonable and necessary in order to get the private plane versus the airplane ticket these are the types of things that you need to be able to identify on your receipts now Ben who is our tax guy in the office always says that you should scan your receipts because receipts fail after a while you can't read those heat printed things anymore or the NCR receipts they disappear actually so scan them because you're going to need them three years from now when the IRS audit you and yes it's going to take them a whole three years, so you need to be sure that your receipts are there on the reimbursement forms that you adopt for your company then you need to have time place why whether it was reasonable that sort of thing any reason why you need to do something and in fact on my envelopes when I write down my expenses for the receipts and put the little paper in the envelope I get all receipts I put them in an envelope and I write a piece of paper and categorize each one of the receipts and explain why it was there travel between this point and this point obviously the meals in the rooms come along with that but they're all listed there on the receipts and on the little piece of paper that I have it isn't an official form that the IRS likes but just remember three years from now when you can't remember what you were doing you need to prove was an ordinary and necessary and was it reasonable this is Lee Phillips talking about your corporate or LLC formalities
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