Why keep records of deductions?
The Australian income tax system is based upon a self-assessment system whereby individuals claim deductions for work related expenses they incur and these expenses are accepted on the face of it as being true and correct by the ATO. Keeping records is a requirement by law. Having proof of purchases will assist with any possible ATO audit sometime down the track.
How to keep records
When claiming a deduction for work related expenses documents that you are required to keep can be in written or electronic form.
Your records can either be kept through:
– Receipts
– Bank Statements
– Diary Entries
How long to keep records
Generally records kept either in hard copy or electronically need to be kept for five years from the date you lodge your tax return.
In recent times the ATO have determined that individuals with simple tax affairs need only to keep records for two years. You are classified as having simple tax affairs if the deductions claim relate to the cost of managing your tax affairs, bank fees or donations.
If you require further information on work related deductions, don’t hesitate to contact us on (02) 9525 2455. or click here.
