If you have any feedback on how we can make our new website better please do contact us and we would like to hear from you.
 
Keeping your tax records:

What is this advice about?

(By clicking on any of the highlighted green text will take you straight to the ATO website and further information on the topic)

The Australian tax system relies on taxpayers self-assessing. This means that you are responsible for working out how much you can declare and claim on your tax return. You also need to be able to show how you arrived at these figures – in some cases you may be required to provide written evidence.

In order to prepare an accurate tax return and support the claims you make, you need to keep careful records - which records depends on your personal circumstances. If you are not sure, it is better to keep too many records than not enough.

This guide will provide general advice to help you identify what records you need to keep.

Why should you keep records?

*       To provide written evidence of your income and expenses.

*      To help you or your tax agent prepare your tax return.

*      To ensure that you are able to claim all your entitlements.

*       In case the Tax Office asks you to prove the information you provided in your tax return.



How long should you keep your records?

Generally, you must keep your written evidence for five years from the date the notice of assessment is sent to you, or:

*       if you have claimed a deduction for decline in value (formerly known as depreciation), five years from the date of your last claim for decline in value
 

*         if you acquire or dispose of an asset, five years after it is certain that no capital gains tax (CGT) event can happen for which those records will be needed to work out a capital gain or loss, and
 

*       if you are in dispute with the Tax Office, the later of five years from the date you lodge your return or when the dispute is finalised.



What are simple tax affairs?

You are classed as having simple tax affairs in an income year if you are an individual taxpayer and:

1.       your income consists only of:

o          salary or wages

o         interest paid by a financial institution or government body, and/or

o          dividends from an Australian company that is listed on the ASX
 

2.       you claim deductions only for:

o         managing your tax affairs

o        bank fees and charges, including taxes and duties, and/or

o       deductible gifts of money and donations of money
 

3.       you are not:

o         a non-resident of Australia for the year of income

o         entitled to a foreign tax credit

o         required to adjust your taxable income because of payments to or from your  associates

o         in receipt of a capital gain or loss that must be taken into account in your tax return, or

o         in receipt of foreign employment income, or income from service on an approved overseas project that is exempt from tax in Australia.



What records should you keep?

You should keep records in these main categories:

*      any payments you have received

*      any expenses related to payments received

*       when you have acquired or disposed of an asset – such as shares or a rental property

*       any tax deductible gifts or donations, and

*       any medical expenses.

This advice tells you what main types of records you should keep in each of these categories. You may also need to keep records in some other categories, or for other members of your family – for instance if you receive the family tax benefit.

Also, in some cases you may need to estimate items, such as how far you will travel during a financial year. At the end of the year, if you travel more than you estimated, you may need to have kept more records.

So if you’re not sure whether or not to keep a record, you should keep it. You can decide whether you need it at tax return time, and you’re better safe than sorry!

Payments you receive

Salary, wages and allowances

Written evidence can include:

*         your PAYG payment summary – individual non business (formerly known as a group certificate), and
 

*          if you do not have a payment summary, a signed letter or statement from your payer.



Income from interest, dividends, managed funds or rental property/s

Written evidence can include:

  • *       statements, passbooks or other documentation from your financial institution showing the amount of interest you receive
  • *       statements from the company, corporate unit trust, public trading trust or corporate limited partnership that pays you dividends or makes distributions to you. These records should show the amount of franked and unfranked dividends you receive, the amount of franking credits and any tax file number amounts withheld from unfranked dividend
  • *    a statement or advice from the managed fund showing the amount of any distribution. The statement should show details of the amount of any primary production or non-primary production income, any capital gains or losses, any foreign income and your share of any credits such as franking credits, and        

*       a record of the rent you receive, such as a statement from your property agent, a    rent book or bank statements showing rental payments transferred into your account, and records of any bond money retained in place of rent.


Government benefits and pensions

Written evidence can include:

*        your PAYG payment summary – individual non business (formerly known as a group certificate), and
 

*        a letter from the agency that pays your allowance, pension or payment stating the amount you receive.


Other pensions or annuities

Written evidence can include:

*      your PAYG payment summary – individual non business (formerly known as a Group Certificate), and
 

*        a letter from the superannuation or pension fund, annuity or retirement savings account (RSA) provider, stating the amount you receive.


Expenses related to payments you receive

For general information about the records you need to keep for work-related expenses, see Keeping work related expense records.

Read on for details of specific types of expenses.

Car expenses

The records you need to keep will depend on your estimated business kilometres travelled. However, your claim at the end of the financial year will depend on your actual business kilometres. Therefore, if you cannot estimate your business kilometres, you should keep documentation as required by the logbook method. This will ensure that you will be able to make your claim under the method which gives you the greater deduction.

If your estimated travel will be more than 5,000kms, you can use one of four methods:

*                    cents per kilometre method (restricted to claiming only 5,000kms)

*                     logbook method

*                        12% of original value method, or

*                     1/3 of actual expenses method.

If you estimated travel will be 5,000 kms or less, you can use either:

*                   cents per kilometre method, or

*                     logbook method


Cents per kilometre method

You need records showing how you calculate business kilometres traveled and the amount of the claim. For example, diary entries and documents you can use to show the engine capacity of your car.

Logbook method

For each year you need:

  • *       odometer readings for the start and end of the period being claimed
  • *       business usage percentage based on the log book
  • *      receipts or other documents showing fuel and oil expenses, or a reasonable estimate based on odometer readings, and
  • *      receipts or other documents showing other expenses related to your car. For example, registration, insurance, lease payments, services, tyres, repairs, interest charges.

Your logbook is valid for five years. If this is the first year you are using this method (or the five years has expired) you will need to keep a log book for this year. The logbook must cover at least 12 continuous weeks and show:

  • *    when the logbook period begins and ends
  • *       the car’s odometer readings at the start and end of the logbook period
  • *       the total kilometres travelled in the log book period
  • *       the kilometres travelled for work activities based on journeys recorded in the logbook. In recording the journeys, you need the start and finishing times of the journey, the odometer readings at the start and end of the journey, kilometres travelled and the reason for the journey, and
  • *       the business use percentage for the log book period.

The following table sets out some of the rules about keeping logbooks in different circumstances:

Circumstance

Rule

First year of using logbook

If this is the first year that you are using the logbook method, you must keep a logbook during this income year.


Using the car for less than 12 weeks before the end of the income year

If you started to use your car for work-related purposes less than 12 weeks before the end of the income year, you are able to continue to keep the logbook in the following income year so that your logbook covers the required 12 weeks.


Keeping logbooks for two or more cars

If you want to use the logbook method for two or more cars, the logbook for each car must cover the same period.


1
2% of original value method

You need either:

  • *     sale or purchase, lease or hire purchase agreement, and
  • *      records of how you calculate business kilometres travelled.

Claims under this method are restricted to 12% of the luxury car limit in the year you first used the car ($55,134 for 1996-2002; $57,009 for 2002-07; $57,123 for 2008 and $57,180 for 2009 and 2010, and $57,466 for the 2011, 2012 and 2013 tax year).

1/3 of actual expenses method

You need:

  • *      odometer readings for the start and end of the period being claimed
  • *      the basis on which the business kilometres were calculated
  • *     details of the make, model, engine capacity and registration of the vehicle
  • *      receipts or other documents showing fuel and oil expenses or a reasonable estimate based on odometer readings, and
  • *       receipts or other documents showing other expenses related to your car. For example, registration, insurance, lease payments, services, tyres and repairs.

If you need more information on claiming car expenses, see Claiming a deduction for car expenses.

Travel expenses

These records may include:

  • *          a travel diary – that is, a document which shows the dates, places, times and duration of your activities and travel
     
  • *       written evidence of your travel expenses, such as invoices, receipts or other documents showing the expense, and travel allowance details
     
  • *       award transport payments. If you claim up to the value of the award that was in force on 29 October 1986, no written evidence is required. If you choose to claim more than this amount, written evidence is required for the whole of the amount claimed
     
  • *        receipts or other documents showing actual costs incurred for using a car owned or leased by someone else – for example, petrol and oil
     
  • *        receipts or other documents showing the amount and date of the expenditure in relation to vehicles other than cars, such as motor cycles, utilities or panel vans with a carrying capacity of one tonne or more, or any other vehicle with a carrying capacity of nine or more passengers, and
     
  • *        receipts or other documents (diary entries) for air, bus, train, tram and taxi fares, bridge and road tolls, parking and car hire fees.

The documentation required for travel depends on the length of stay and whether a travel allowance has been received. Where a travel allowance is received and you restrict your claim to the Commissioner’s reasonable amount, you do not need to keep written evidence of the expenses incurred. For more information, see Claiming travel expenses.

Other work-related expenses

Clothing, uniform, dry cleaning, laundry and sun protection

These records may include:

  • *       receipts or other documents showing expenses for uniforms and occupation-specific and protective clothing
  • *      a basis for your claim for laundry costs if claiming less than $150
  • *        diary entries, receipts or other documents evidencing claims greater than $150
  • *         receipts or other documents showing dry cleaning costs, and
  • *        receipts or other documents showing expenses for sun protection items.

If you need more information on claiming these expenses, see Claiming a deduction for work clothing.

Self-education expenses

These records may include:

  • *       receipts or other documents showing expenses such as course fees, textbooks, stationery, decline in value of and repairs to depreciating assets, and
     
  • *       receipts, documents or diary entries relating to travel expenses.

If you need more information on claiming these expenses, see Claiming self-education expenses.

Other expenses

These records may include:

  • *        receipts, other documents or diary entries you make to record your expenses – for example, a diary maintained over a representative period to support the apportionment of computer home office costs
     
  • *      receipts or other documents showing expenses related to the decline in value of depreciating assets, and
     
  • *         PAYG payment summaries showing items such as union fees and overtime meal allowances.

If you need more information on claiming these expenses, see Miscellaneous work related expenses.

Rental expenses

These records may include:

  • *      documents such as bank statements showing the interest charged on money you borrowed for the rental property
     
  • *        receipts or other documents showing other expenses related to your rental property – common examples include advertising, bank charges, council rates, gardening, property agent fees and repairs or maintenance, and
     
  • *       documents showing details of expenses related to the decline in value of depreciating assets or any capital work expenses, such as structural improvements.

For more information on rental properties, see Income from rent.

When you have acquired or disposed of an asset

If you acquire or dispose of an asset which might be subject to capital gains tax, you should keep the following:

  • *     documents showing the dates you acquired an asset and the date the capital gains tax (CGT) event occurred. A CGT event must occur for a capital gain or loss to arise. There are a wide range of CGT events but the most common CGT event occurs when you sell or give away an asset. Common examples of documentation are contracts for the purchase or sale of an asset (such as real estate or shares) and dividend reinvestment statements from your unit trust or managed investment fund
     
  • *       documents showing the amount and date of any expenditure in relation to that asset. In some cases the expenditure is needed to calculate any gain or loss – for example, council rate notices for a vacant block of land, and
     
  • *      records of any net capital losses made in previous years. You may be able to offset these against capital gains in this year.

For more information on capital gains and losses, see Introduction to capital gains tax

Gifts, donations and contributions

Written evidence may include:

  • *       receipts for donations or contributions
     
  • *       your PAYG payment summary – individual non business (formerly known as a group certificate) where you make donations to eligible organisations through your pay, and
     
  • *       a signed letter from the eligible organisation confirming the amount of your donation or contribution (and the amount of the minor benefit, where you have made a deduction for a contribution where there is a minor benefit – for example, a charity dinner.)

*                 more information on claiming gifts or donations, see Making tax deductible donations 

M
edical expenses

Written evidence may include:

  • *       receipts or other documents to show the medical expenses you can claim – for example, payments to hospitals, doctors, dentists, opticians and chemists for expenses relating to an illness or operation
     

    *        documents for any payments made to residential aged care facilities – some of these payments may be considered medical expenses, and
     
    *      statements from Medicare or a private health fund.

You should keep these documents that relate to you as well as payments made for your dependents. This generally refers to your spouse and children but may also include other dependents.

For more information on claiming medical expenses, see Net medical expenses tax offset.


Relying on our information - our commitment to you

We are committed to providing you with advice and guidance you can rely on, so we make every effort to ensure that what we give you is correct.

We would advise that professional advice be sought as to your personal circumstances before relying on any of this information. Some of the advice and guidance on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our advice and guidance does not fully cover your circumstances, or you are unsure how it applies to you, please contact us.



  Site Map