Ready for your tax return?

The Australian Taxation Office (ATO) requires you keep all records relating to your tax return for five years from the date you lodge it. Keeping track of your paperwork is not always easy, and many people struggle to know what documents to keep and how they should be maintained. Here are some tips to help take the stress out of completing your tax return.

The ATO recommends that you refer to their ‘Records you need to keep’ online content which includes a link to a summary of this information in a poster. You can visit the ATO website to understand what records you must keep to claim deductions.

To get organised for next tax time, download the ATO app for a fast and easy way to keep track of your records on the go.

The records you keep don’t have to be in paper form; electronic receipts or photos of your receipts are also acceptable. Keeping track of your records on the go is easy with the myDeductions tool in the ATO app. 

In myDeductions you can keep records of:

• any work-related expenses (including a logbook feature for car trips)
• gifts or donations
• cost of managing tax affairs
• other deductions.

Then, at tax time, you can import the records into myTax or send them to your tax agent. 

Download the app now – it’s free from your app store. For more information visit ato.gov.au/myDeductions.

Talk to a registered tax agent if you need more guidance about maintaining your tax records. A quick online search will also reveal various organisations that provide downloadable checklists. You can also create your own checklist, incorporating some or all of the following items. 

Income

• Income statements or payment summaries from employers
• Lump sum and employment termination payments
• Government payments (including taxable COVID-19 support payments such as the Pandemic Leave Disaster Payment)
• Interest from banks and other financial institutions
• Dividend statements
• Spouse income, including taxable and exempt income
• Other income (e.g. from rental property income, foreign income, capital gains from shares, rental or crypto)

Deductions

• Work-related expenses, such as: 
  • Compulsory uniforms or protective items 
  • Self-education and professional development
  • Union, registrations, tools, subscriptions, seminars, conferences
  • Working from home expenses 
• Donations to registered charities or building funds.

Offsets and refunds

• Private health insurance rebate and offset
• Low and middle income earners tax offset

Popular accounting software packages offer apps that you can download to your mobile device to assist in record-keeping. The data maintained will not only help you if you’re lodging your own return, but can also be forwarded to your registered tax agent if he or she is preparing and lodging it for you.

Just a small word of warning: If you choose to download an app to maintain your tax records, ensure that the app adheres to Australian tax standards. This means you will be keeping the information that the ATO needs.

Some people choose to pay a registered tax agent to prepare their tax return and lodge it online. Registered tax agents use the data you provide them, so appropriate record-keeping will help to keep this process quick, simple, cost-effective and accurate.

There are some problems that can arise with maintaining your tax records. For example, they may be lost or inadvertently destroyed. If so, you must make every effort to obtain a copy, or if unsuccessful, you may need to provide evidence to the ATO that you tried, if asked.

Overlooking items or misplacing receipts could also mean that you are short-changing yourself when making claims.

Some people are tempted to guess amounts for deductions, but if they get them wrong, this could result in penalties and interest for making an incorrect claim. Remember that even though you might not need to present all of your documents when you lodge your tax return, if the ATO queries your claims, you must have the records to substantiate them.

Note: The information contained in this article is not to be taken as taxation advice. You should always consult a tax advisor for all tax-related matters. This article was originally published in July 2019 and updated in June 2022.