Man reviewing receipts

Good record keeping makes tax time easy

Tax time is not straight forward, however with a little planning and record-keeping you can ensure it is a hassle-free time of year.

To claim a deduction for work-related expenses:
– you must have spent the money yourself and weren’t reimbursed
– it must be directly related to earning your income
– you must have a record to prove it.

You can only claim the work-related part of expenses. If an expense relates to both work and personal use, you must apportion use on a reasonable basis and only claim the work-related portion.

Records you need to keep

If you claim work-related deductions you must have records or be able to show how you calculated your claims.

Records are usually a receipt from the supplier of the goods or services.
The receipt must show the:

  • name of the supplier
  • amount of expense
  • nature of goods or services
  • date the expense was paid
  • date of the document.

TIP: If you’re not having any luck filing these in paper format, why not take a photo and save them to your computer, or use the MyDeductions app from the ATO. You can then simply email us all your information from the app when you’re ready to do your tax return – simple!

Record keeping exceptions

In some instances, you may not need receipts, but you will still need to be able to show you spent the money and how you calculated your claim.
Exceptions to the record-keeping rules are there to make things simpler – they do not allow you to claim an automatic deduction up to the specified amount where the money has not been spent.

Keeping your records

You need to keep your records for five years from the date you lodge your tax return.
If you are claiming for the cost of a depreciating asset that you have used for work – eg a laptop – you must keep purchase receipts and a depreciation schedule, or details
of how you calculated your claim for the decline in value, for five years following your final claim.

As we may ask that you produce your records during the five years, it is important that you have sufficient evidence to support your claims.

Commissioner’s discretion

If you are unable to obtain a receipt from a supplier, you can still claim a deduction if the ATO is satisfied that the nature and quality of the evidence
shows that you:

  • spent the money
  • are entitled to claim a deduction.

Evidence can include bank statements or credit card statements which show the amount that was paid, and when and who it was paid to, as well as other documents that outline the nature of
the goods or services provided.

Insufficient Evidence

If you paid cash to a supplier and have no other documentation to support your claim, you will not have sufficient evidence to claim a deduction.

For more information read Keeping Your Tax Records on the ATO website.

Still, need help?

If you need more assistance in determining your claims please don’t hesitate to get in touch with one of our expert Accountants. We are here to help and can ensure a smooth and efficient tax return.