Mastering Tax Record Keeping: A Guide for Individuals: By Naomi Clark

Why Record Keeping Matters

When it comes to tax time in Australia, keeping accurate records of your work-related expenses is crucial if you want to claim deductions. The ATO has specific guidelines to ensure that individuals maintain the necessary records, which will support their claims and avoid issues during tax assessments.

Basic Record Keeping Requirements

For any work-related expenses you wish to claim, you need to keep detailed records. These typically include a receipt from the supplier showing the:

• Supplier’s name
• Amount of the expense
• Description of the goods or services
• Purchase date
• Date of the document

Simply having a bank or credit card statement is not sufficient unless it includes all the necessary details.

Duration of Record Keeping

You must keep your records for five years from the date you lodge your tax return. If you claim a deduction for the decline in value of a depreciating asset (e.g. computer or car), you must keep the records for five years from the last claim related to that asset.

Specific Work-Related Expenses

Car expenses:

• You can use either the cents per kilometre method or the logbook method to claim car expenses.
• The cents per kilometre method doesn’t require receipts but limits claims to 5,000km per car per year.
• The logbook method requires a 12-week logbook period reflecting your annual travel patterns, and you must retain odometer readings and fuel receipts.

Clothing, Laundry, and Dry-Cleaning Expenses:

• Receipts are required for all work-related clothing expenses, except for laundry claims under $150.
• Dry-cleaning expenses always require receipts.

Self-Education Expenses:

• If you claim self-education expenses, you must retain records for all related costs, including course fees, textbooks, and travel expenses.
• The course must directly relate to your current employment.

Depreciating Assets:

• Items costing $300 or less can be immediately deducted if used solely for work purposes. More expensive items need to be depreciated over their effective life.

Working From Home Expenses:

• There are two methods to claim working from home expenses: the fixed rate method (requiring records of total hours worked from home) and the actual cost method (requiring receipts for every expense claimed).

Overnight Travel Expenses:

• Record-keeping requirements depend on the nature of the travel and whether a travel allowance was received. Documentation such as travel diaries and receipts for accommodation, meals, and other travel-related expenses are required.

For more detailed record keeping guidance, you can visit the ATO’s occupation-specific guides or consult with one of our friendly tax professionals. 

Sources

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/records-you-need-to-keep

https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/in-detail/occupation-and-industry-specific-guides

https://iorder.com.au/publication/Download.aspx?ProdID=75500-05.2024