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Keeping Tax Records in Australia to Maximise Your Refund

We’ll be the first to admit, there’s a whoooooole heap of different things you need to try and remember each and every tax time. Doing it once a year makes it hard to remember what to do and what tax records to keep! That’s why we’ve prepared this guide and many others to help you ensure you’re as prepared as possible when it comes to tax time! 

If you want to be able to do your tax return easily, keep reading!

First Things First – What Do You Get Taxed On? 

Before we dive into some record keeping tips, let’s get our heads around what we are actually being taxed on. In short, you are taxed on your income streams. These could include, but are not limited to:

  • PAYG summaries 
  • Pensions and government allowances 
  • Interest earned (banks etc)
  • Dividends 
  • Rental property income
  • Business income
  • Other income earned (capital gains etc)

What Do You  Need To Record In Order To Maximise Your Money?

The things we are recording are called “tax deductible expenses”. Tax deductible expenses are things that the ATO allows you to claim as a deduction to how much tax you pay. By claiming all of the tax deductions you are entitled to, you maximise your money by paying less tax. 

These tax deductions are anything that will allow you, or help you, do your job. As such, they will change for each occupation, so you should check out these tax deduction checklists here. As a rule of thumb, you are allowed to claim: 

  1. Car expenses and general wear if your car use is work related (estimated Km or a logbook with all expense items)
  2. Travel expenses for your work (flights, taxis and trains etc)
  3. Accommodation needed on work reasons (including meals)
  4. Phone bills for work
  5. Work related computing 
  6. Working from home costs 
  7. Self-education 
  8. Tax return fees dating to the year previous 
  9. Insurances 
  10. Rental expense (if you are renting)
  11. Charity donations and gifts
  12. Sun protection (if you have to work outside)

What Is Written Evidence For Tax Purposes? 

Written evidence is what you must keep to prove to the ATO that the tax deduction you are claiming/have claimed is real. Written evidence can be: 

  • An invoice from a supplier or a receipt and shows:
    • Name of supplier 
    • Amount of expense 
    • Description of good/service
    • Dates

What If You Didn’t Get Written Evidence? 

Sometimes you might not get written evidence. This is fine, just make sure you write down what the expense was with all the relevant information, and gather proof of the purchase from your bank statement. The sorts of things where you might not get written evidence include: 

  • Parking tickets 
  • Toll roads
  • Other minor purchases 

How Long Do You Need To Keep Your Records And Tax Receipts? 

As a rule of thumb, the ATO suggests you keep your tax records and receipts for 5 years. The sort of thing the ATO will ask you to face check include: 

  • Claimed a deduction for something that has declined in value, or depreciated
    • Keep the record for 5 years after the date of your last claim
  • Acquired or disposed of an asset 
    • Keep the documentation for 5 years after the sale for capital gains/loss
  • Are in a dispute with the ATO 
    • Keep the records for 5 years after the date of dispute 

Some Tips And Good Habits For Keeping Tax Records 

So let’s get into the crux of it. It’s all well and good to say “you need to keep these records”, but it isn’t as easy as it looks. Try these tips: 

Be Organised

It may seem like a no brainer, but be organised. Keep your documentation in a logical filing system, in date order. As soon as you start throwing things into a draw without reason, you’re bound to lose things.

Have A List Of Tax Deductions

If you know what sort of things you are able to claim, you’re more likely to keep a record for when you make the expense. If you want a tax deduction checklist, you can get one here.    

Backup Your Records 

Receipts over time fade and somehow find a way to go missing all on their own. It’s always a good idea to take photos and photocopy your receipt just in case something bad happens to them. 

Use An Online Platform 

You can accomplish all of these previous tips by using an online tax platform like One Click Life. Professionals are there to help you arrange and record your tax all at your convenience! 

Who Will Do Your Tax Return For You? 

If you want a quick, easy, surefire way to make sure you claim all of your expenses in your tax return, then look no further than One Click Life. One Click Life offers you a platform to view all of your life admin in one place with the help of some of the best professionals in the industry. Lodge your tax return online with us for one of the best online tax returns in Australia!

Life admin can be tedious, boring, and easy to make a mistake with, so let us take care of it. By letting us do it for you, you can make sure you’re spending your time on the things you love doing!

When it comes to online tax returns in Australia, we really will make sure you maximise your tax refund.