The following community information is brought to you by the Australian Taxation Office. Interview with ATO Officer Jagjit Singh.
The Australian tax system relies on taxpayers self-assessing. This means 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. The records you need to keep depend on your personal circumstances. If you are not sure, it is better to keep too many records than not enough.
The key tips to make keeping records easy are:
- Keep your records electronically - for instance on your phone or laptop, and
- Keep evidence of all transactions and take pictures of any paper receipts because paper records can fade quickly.
In most cases, you need to keep them for five years and don’t forget to keep your business records separate from your personal records.
You need to make sure your business records include cash, online, EFTPOS, banks statements, credit and debit card transactions.
Also, you need to keep records showing when you use business purchases for private purposes. This will help you work out the business portion you can claim as a deduction and prove your claim.
Good record keeping includes collecting information about any payments you make to contractors and subcontractors. You should record details like a contractors name, address, ABN and total amount you paid them within a financial year - details that are generally on the invoices given to you.
Remember, without proper records you may not be able to claim what you’re entitled to.
ATO has a record keeping tool called myDeductions in the ATO app. myDeductions is an easy and more convenient way to keep your tax deductions and income records all in one place.
This video shows how easy it is to keep your records using myDeductions.
Individuals claiming general or employee work-related expenses can use the tool. Sole traders with simple tax affairs can also use the tool to record their business income and expenses.
You can email your records to your tax agent or upload it to your tax return through myTax.
For more details go to https://www.ato.gov.au/Individuals/Income-and-deductions/In-detail/Keeping-your-tax-records/
If you need some help, you can speak with a tax officer in your native language by phoning the Translating and Interpreting Service on 13 14 50 and ask to be connected to 13 28 66.
