Tax record keeping song and dance

November 17, 2009

The year is winding down. You're trying to gather of all your receipts. (Yeah, I know, next year you'll institute that record-keeping system). But some paperwork is missing.

What can you do?

You might want to check out a 79-year-old rule regarding the estimation of tax deductions.

In 1930, a federal court ruled that a famous actor, playwright and producer could deduct entertainment expenses based on estimated expenses, rather than having to produce detailed records of each expenditure. The holding in this case became known as the Cohan Rule.

Yep, Cohan as in George M. As in the man most of us think looked like Jimmy Cagney, since the actor portrayed the multi-talented artist in the movie Yankee Doodle Dandy. (Yes, Cagney started out not as a gangster, but a song and dance man himself.)

But as The Wandering Tax Pro, known to his friends as Robert D Flach, tells us in I'm a Yankee Doodle Tax Pro, the vaudevillian's name also has a lauded place in tax law.

Robert provides a nice examination of not only Cohan's entertainment background, but the Cohan Rule.

And being a tax pro with taxpayers' best interests in mind, RDF also offers these wise words when it come to write-offs:

Despite the fact that [the Cohan rule] "out" exists, you should not use it as an excuse not to keep good contemporaneous records and maintain detailed documentation of all your business expenses.

When you have the proper paper to back up your tax claims, you'll be doing a tax dance as happy as the one Cagney and Judy Garland performed in the Cohan-themed movie.

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We made it. Tax Day 2025 is finally over. For most of us. When the filing season started on Jan. 26, millions who were expecting refunds filed immediately. Most of us got our returns to the Internal Revenue Service by April 15. But plenty of taxpayers also got extensions. They are looking at an Oct. 15 filing deadline.

Those procrastinating filers aren’t a problem. In fact, the IRS appreciates taxpayers who take time to fill out their 1040 forms correctly. It also is grateful that tax submissions are spread out a bit, especially now that the IRS is a leaner agency. Processing returns is easier when they arrive throughout the year instead of in massive bunches.

But enough about Uncle Sam’s tax collection issues. The focus now is on all y’all who filed for extensions, giving you another six months to complete your return. Since your new mid-October due date will be here before you know it, let’s get started now on meeting it.

The ol’ blog is here to help you finish up your extended Form 1040. You can start with January’s tax tips page, which has links to the rest of the year’s tips by-month collections. You also can peruse various tax categories for more tailored advice by clicking on the More Tax Posts drop-down menu at the top of this (and every) page.

And to make sure you don’t miss your new filing deadline, the count-down clock below will let you know just how much time you to file by Oct. 15. At the latest.e. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

Comments
  • KB-
    Thanks for the reference – and for the great film clips.
    The clip with Mickey and Judy was a real treat!
    TWTP

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