Tax Record Keeping
During the financial year you’ll receive documents that are important for doing your tax, such as payment summaries, receipts, invoices and contracts. Good records allow you to report your income accurately and claim all the deductions to which you are entitled, including when you work out your capital gain or capital loss after you dispose of an investment.
Generally, you need to keep these for 5 years from when you lodge your tax return in case the ATO ask you to substantiate your claims.
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
- purchase and sale details, including any contracts
- expenditure records
- Details of capital losses made in previous years (you may be able to offset these losses against future capital gains).
- Tenant and rental records.
If your total claim for work-related expenses is $300 or more, you must have written evidence to prove your claims.
Records of expenses must include the:
- name of the supplier
- amount of the expense
- nature of the goods or services
- date the expense was incurred
- date of the document.
If you acquire a capital asset – such as an investment property, shares or managed fund investment – start keeping records immediately because you may have to pay capital gains tax if you sell the asset in the future. Keeping records from the start will ensure you don’t pay more tax than necessary.
Your documentation must be in English, unless you incurred the expense outside Australia.
You need to keep records relating to your investments showing how much you paid for them, what you received if you disposed of them, what income you received from them and the expenses you incurred in owning them and maintaining them.
If a document does not show the payment date you can use independent evidence, such as a bank statement, to show the date the expense was incurred.