Record Keeping Requirements

Author - Marcus Davis, Tax Specialist

I am in the process of gathering my tax information and am wondering what receipts I need & how long I need to keep them?

From an income point of view, the types of documents you need include PAYG payment summaries, bank interest statements, dividend slips, real estate agent statements or any other record of your income.

However, the key area for most taxpayers is ensuring they have sufficient written records to substantiate the expenses they have claimed. Generally, the types of expenses you need to keep records for are: expenses incurred whilst earning income; expenses in relation to your assets; gifts and donations; and medical expenses.

The types of written evidence that will support your expense claim includes tax invoices, receipts, bank statements, a motor vehicle logbook, a travel diary and donation receipts.

You don't need documentation where expense is less than $10 and the total of all such expenses is less than $200. Furthermore, you don't need to prove your expense claim where the total in your tax return is less than $300.

For some expenses you don't need to keep receipts, for example laundry and uniform expenses. Where you can prove a reasonable basis for calculating the deduction you can claim up to $150. For greater than $150, written documentation is needed.

You also need to keep documents to evidence the cost base of your assets, including the amount you paid, the cost of buying or selling etc. This helps to calculate any capital gain/loss from the sale of the asset.

In relation to medical expenses, to claim the tax offset you need to keep records of all medical expenses including invoices from health practitioners, hospitals, residential aged care facilities and your Medicare or a private health fund statements.

For most expenses you have to keep the written evidence for at least five years following the issue of you tax assessment by the ATO. Different rules apply for business taxpayers.

If in doubt as to whether certain records need to be kept, at the end of the day it is better to keep too many records than not enough.

This information is general in nature and readers should seek specialist advice before making financial decisions. WHK Pty Ltd ABN 84 006 466 351

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