Records to be kept by individual taxpayers

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ATO relies on self-assessment of your tax return and accepts the details you provided as true and correct. However, ATO has the right to demand proof of your income and expense deductions included in your tax return. Therefore, your tax return may be subject to further review. You need to keep adequate records of income and expenses you claimed so that in case of review by ATO you could prove the information you provided in your tax return.

Further, with adequate and timely record keeping you will be able claim deductions for all expenses you are entitled to and maximise your tax refund. It will also help you to provide adequate and timely response to ATO’s questions and reduce risk of further investigation or audit by ATO.

How long do you need to keep records?

Generally you need to keep your records for five years from the date of lodgement of your tax return. Longer retention period applies to records relating to assets for which you have claimed deduction for decline in value or assets that might be subject to capital gain tax.

Shorter retention period of two years applies if you have simple tax affairs.

What is Simple tax affairs?

You are considered as having a simple tax affairs if:

  • Your income doesn’t include anything other than salary/ wages, interest from bank or government body and dividend from Australian ASX companies.
  • Your deductions don’t include anything other than cost of managing your tax affairs, bank fees and charges and deductable gifts
  • You are not a foreign resident for the income year, you are not entitled to foreign tax credit, you have not received from or paid to an associate, you don’t have capital gain or loss, you did not receive foreign income

What can be kept as records?

Below are a brief summary of records that need to be kept.

  • Income -Pay as you go (PAYG) payment summary for salary and wages, bank statement for interest, dividend statement with franked and non-franked amount and franking credits for dividends, statement from property agent for rental income.
  • Tax deductable expenses – receipts or invoices with name of supplier, ABN, amount, date and nature of goods or services purchased.
  • Work related car expenses – Log book or diary entry records to show the work related kilometres travelled. Diary entry is allowed only when you are claiming deduction based on cents per kilometre method.
  • Travel expenses -a travel diary showing the dates, places, times and duration of your activities and travel, receipts or other document, receipts or other documents (such as diary entries) for air, bus, train, tram and taxi fares, bridge and road tolls, parking and car-hire fees.
  • Other work related expenses – receipts, other documents or diary entries you make to record your expenses – for example, a diary maintained over a representative period to support the percentage of computer home office costs.
  • Acquisition or disposal of assets – documents showing the dates you acquired an asset and the date the capital gains tax (CGT) event occurred, contracts for the purchase or sale of an asset (such as real estate or shares)

Can scanned copy of documents be kept?

Photocopy or scanned copy of original documents can be kept for ATO records. Paper or electronic copies must be a true and clear reproduction of the original document.