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Keeping Records for Tax: What do you need?
One thing to keep in mind is your work related expenses. If your work related expenses total $300 or more, you must have written evidence to prove your claims. When you are claiming Tax, one of the most important things you need to think about is keeping records for everything that you are claiming.
Records for tax – What do you need to keep?
Here are some things that are good for you to be keeping records of:
- Payment summaries
In general, you need to keep these records for at least five years from the date you lodge your tax return. The reason why you need to hold onto these records is that you may need to prove and substantiate your claims to the ATO during that period.
What’s is the most important records to hang onto?
Records you need to keep include:
- Payment summaries from payers, including your employer and the Department of Human Services
- Statements from your bank and other financial institution showing the interest you’ve earned
- Dividend statements from companies
- Summaries from managed investment funds
- Receipts or invoices for equipment or asset purchases and sales
- Receipts or invoices for expense claims and repairs
- Tenant and rental records.
You need to make sure that you that all the documentation that you keep in Australia is in English. The only foreign language documentation permitted are documents you receive when an expense has been incurred outside of Australia.
If you acquire a capital asset (like an investment property, shares, or manage fund investment) the best thing to do is to immediately start keeping records. If you sell the asset in the future, you may have to pay Capital Gains Tax. Maintaining your records on this help prevent you from paying more taxes than is necessary.
What you need to remember
You need to keep these records for at least five years to substantiate your claims if the ATO inquires about expenses claimed on tax.
Check out another recent blog in this category.
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