Is there an IRS threshold for expenses without a receipt? And for something less than, say, $75, do we not have to 1099 the vendor?


There are two parts to your question. With regard to receipts, the IRS does not require receipts for expenses under $75 dollars, with exception of hotels (though hotels are almost all above $75 anyway).

With regard to vendor expense reimbursement, if you reimburse a contractor under the rules of an accountable plan, then you are not required to include the reimbursement amount on a 1099 to the vendor. An accountable plan (see IRS Publication 463, page 30) requires that the expense has a business purpose, the reimbursed party provides documentation of the expense, and in the case of a cash advance, any excess is returned in a reasonable period of time.

So if a vendor incurs expenses on your behalf (in the course of working for you), you do not have to report the expense reimbursement if they have documented the expense. You still have to report your fees to them for services.

You do not have to have receipts to show the IRS for expenses in amounts below $75. According to TAPN surveys, most companies have a lower threshold for requiring receipts than the IRS—most require receipts for expenses of $25 or more, or simply require all receipts.

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