What does it mean to substantiate an expense?

Substantiating an expense simply means record keeping in accordance with IRS guidelines.  Typically the following information should be recorded for any expense:

• date of purchase
• description of purchase
• amount of purchase
• business purpose (i.e. why was this necessary?)

Most expenses that do not require a receipt still must be substantiated.  Travel expenses that do not exceed $75 are an example of these types of expenses.  For example, assume a pilot or flight attendant tips the van driver $1 to get from the airport to the hotel.  That $1 tip does not require a receipt because it is less than $75 (note that having 100 $1 tips does not require receipts, but 1 $100 expense would because the individual expense exceeded $75).  Even though a receipt for a van tip might not be required, it still must be substantiated.  


EZPerDiem helps to automatically substantiate van tips.