Remind Yourself of The ATO’s Record-Keeping Requirements for Taxpayers

by | Aug 21, 2024 | Uncategorized | 0 comments

Rob Thomson, who is the ATO assistant commissioner, has issued a reminder on behalf of the ATO to keep taxpayers like yourself wary of how to actually maintain proper records for any work-related expenses you have – which is a key area of focus for the ATO. These kinds of expenses – including both working from home and car costs – are generally the largest deduction category there is (over 8 million claims in the last year). To actually claim these deductions, though, it’s imperative that you’ve kept receipts and documentation for around five years after you’ve lodged your tax return.

Thomson brings up their three “golden rules” when it comes to deductibility:

  • The expense has to be related directly to earning income
  • You, the taxpayer, need to have incurred the expense
  • You need to have the records to prove it (a simple bank statement won’t be enough evidence here)

Keep in mind, too, that while claims under $300 don’t technically require receipts, you will still have to show that you spent that money and justify your claims.

If you work from home, you’ve got the option of two different methods you can use here:

  • Fixed Rate Method: Involves keeping records of all the hours you worked and the related expenses
  • Actual Cost Method: You’ll need to keep detailed documentation of all expenses

As for car expense claims (which around 3 million plus taxpayers made throughout 2023), the vehicle has to be owned or leased by you and used only for work-related trips – in terms of how you actually calculate that, you’ve got the logbook method (which requires 12 weeks of representative travel records) or the cents per kilometre method (which is capped at 5,000km per car)


Stay Tax Compliant with Advisory One

Keeping on track of this information – whether you’re using the actual cost method for WFH jobs or the logbook method for your car – naturally takes some highly detailed planning, which can definitely be a bit too methodical for some people and could result in errors and ultimately void claims. As such, we recommend partnering with our chartered accountants today at Advisory One so you can stay fully compliant and get the deductions you deserve – get in touch with us or call at 02 6324 5888 to learn more.