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  • Using myDeductions - information for individuals and sole traders

    The ATO app's myDeductions tool makes it easy and convenient for you to keep tax-related records in one place. The record-keeping tool allows individuals and sole traders to keep track of their general, work-related and sole trader deductions (and business income).

    The myDeductions tool has been available in the ATO app since 2015-16. Not all options were available in the first year. It has been expanded over time to capture more deductible expenses. Business record keeping for sole traders was introduced in 2016-17.

    When you first open myDeductions, you'll see a 'Personalisation' screen, where you can choose whether you'd like to use the tool as an employee, a sole trader, or both.

    As a result of the tool's enhancements, there are also a number of changes to its appearance. For example, the 'Back up' function is now located on the home screen.

    From 1 July each year you can upload your records to us to prefill your tax return. If you have a tax agent, they will be able to access your uploaded data through their practice management software. You can also email your tax agent a spreadsheet with details of each entry, or send them your complete back up file containing your records and photos of receipts.

    Sole traders with simple tax affairs

    Sole traders with simple tax affairs can use myDeductions to record income and expenses. In this instance, 'simple tax affairs' means you don't have:

    Entering deductions into myDeductions

    Individuals can use myDeductions to record the following deduction types:

    • car expenses (work or self-education)
    • work-related travel expenses
    • work-related uniform expenses
    • work-related self-education expenses
    • other work-related expenses
    • interest deductions
    • dividend deductions
    • gifts or donations
    • cost of managing tax affairs
    • other deductions.

    If you are claiming deduction types not listed here, you will need to enter them directly into your tax return.

    Sole traders can record the following deduction types:

    • repairs and maintenance
    • motor vehicle expenses
    • all other expenses.

    See also:

    Changes to cost of managing tax affairs

    From Tax time 2018 the cost of managing tax affairs (COMTA) will be split into the following three fields in your tax return:

    • ATO interest
    • litigation costs
    • other expenses incurred in managing your tax affairs.

    Before 1 July 2018, all COMTA expenses incurred were recorded as one expense type. When you upload your deductions at Tax Time 2018 your COMTA will pre-fill into ‘Other expenses incurred in managing your tax affairs’. You will receive a prompt asking you to update the COMTA expense directly in your return if you think it should be recorded at ATO Interest or Litigation costs.

    The update to myDeductions on 1 July 2018, will allow COMTA expenses to be recorded as either:

    • litigation costs
    • other expenses incurred in managing your tax affairs.

    The third COMTA field 'ATO Interest' will not be available in myDeductions as this information will pre-fill directly to your tax return from our systems.

    Keeping records using myDeductions

    In order to correctly record your data, you should make sure only one person's data (whether employee, business or both) is recorded in the tool.

    myDeductions doesn't currently cater for multiple users on the same device.

    Claiming deductions for partly private expenses

    Not all deductions are 100% claimable and may have to be apportioned. If this is the case, toggle 'No' to the question 'Is this 100% claimable?' You will then be able to enter either a dollar value (greater than zero) or percentage amount of the expense that you are entitled to claim.

    Back up and restore help

    Storing data and photos in myDeductions

    When you enter income (sole traders only), expenses, trip details, or attach photos in myDeductions, they're stored on your device. The data and photos are not automatically sent to us. We highly recommend that you regularly back up your data in case you can't access it anymore – for example, if you lose your phone.

    You can also use the back up and restore facility if you want to change devices – for example from Apple to Samsung. This will allow you to transfer your myDeductions records to the new device.

    The ATO app doesn’t automatically back up so you'll need to manually back up your data regularly.

    Back up data and photos on Android and Apple devices

    You can use the 'Back up' option available in the myDeductions tool or your own back up process for your device. If you choose to back up your data using the option in the tool, a zip file will be created which will include the following files:

    • your photos
    • a spreadsheet with all of your data
    • a computer system file that can be used to import your data back into the app
    • a text file with instructions on how to import your back up data back into the app.

    Backing up to iCloud/Google Drive

    To make backing up quick and easy, you can connect the ATO app to your personal iCloud (for Apple users, see note) or Google Drive (for Android users) account.

    Backing up your data and photos is then simple. Select 'Back up' on the myDeductions home screen and follow the prompts.

    If you haven’t already connected the ATO app to your iCloud or Google Drive, you can do this by selecting 'Back up' from the myDeductions home screen and then selecting the ‘Connect to your iCloud/Google Drive’ link under the 'Back up' button.

    Note: Connecting to iCloud is only available for devices running iOS 9.3 or later.

    Backing up to another location

    If you want to back up your data to another location, for example a different cloud provider or via email, select the 'Back up' button on the myDeductions home screen. If you haven’t connected the ATO app to your iCloud or Google Drive, select the 'Back up' button. If you have connected, select the 'Or back up to another location' link.

    Restoring or deleting a back up file – iOS and Android

    From your iCloud/Google Drive connected to the ATO app

    If your data is backed up to your personal iCloud/Google Drive you can restore or delete any previous back up files by selecting 'Back up' on the myDeductions home screen.

    Select the file you want to restore or delete from the list at the bottom of the screen and select the relevant option.

    If you are restoring onto a new device, you will need to connect to your iCloud/Google Drive again to access your back up files from within the ATO app. To do this, select the ‘Connect to your iCloud/Google Drive’ link on the 'Back up' screen.

    From another location

    If you've backed up to another location, go to that location and select the file. Choose the export or open file option and then select the ATO app from the list (see notes).

    Notes:

    iOS – If 'ATO' doesn’t appear, you may need to select ‘Open in’ first.

    Android – If a list doesn’t display, you may have another app set as a default to open zip files with. Clear defaults by going to Device settings > Apps > the app it is opening with, for example ‘My Files’ > Set as default > Clear defaults.

    Backing up and restoring – Windows

    Backing up

    To back up your data (not including photos) you will need to connect the ATO app to your personal OneDrive account. To set this up or to initiate a back up once connected, go to:

    myDeductions > Settings > Back up.

    To back up your photos go to:

    myDeductions > Settings > View and save data and photos > Save photos.

    Your photos will be saved to your 'Saved pictures' folder on your phone. It is highly recommended that you save these photos to another location, for example your personal cloud, in case your phone is lost or damaged.

    Restoring

    Go to your OneDrive account and find your latest ATO back up file. Select the file, then select ATO app from the list of apps to open the file with.

    Photos can't be restored into the ATO app on a Windows phone.

    Disconnecting the ATO app from your cloud

    If you have previously connected the ATO app to your personal cloud and you want to disconnect, follow the applicable steps below for your device.

    iCloud (iOS)

    • Device settings > Your name (Apple ID, iCloud, iTunes & App Store) > iCloud > Scroll down and toggle ATO off.

    Google Drive (Android)

    • Device settings > Google > Connected apps > ATO > Disconnect, or
    • Open Google Drive on a desktop (cannot be done via the app or mobile site) > Settings icon > Settings > Manage Apps > Australian Taxation Office – Options > Disconnect from Drive.

    Note: Disconnecting the ATO app from Google Drive will not be reflected immediately in the ATO app, however, backing up or restoring to Google Drive will not be successful.

    OneDrive (Windows)

    Share via email

    You can share your data via email by selecting Settings > Share via email if you're using iPhone or an Android device. Windows users can share their data via email by selecting Settings>View and save data and photos>View data.

    You might want use this option to send your records to:

    • your tax agent
    • an email account for safe keeping

    Data for one or multiple financial years can be selected to send in one file. A spreadsheet is automatically created for you.

    When selecting share via email, some devices provide options for how you can share - for example email or other file sharing options like dropbox.

    Using the Share via email option to send data to your tax agent lets you both see all of your records and trip details. Photos are not included. If your tax agent wants a copy of your photos, you'll need to create a back up file to send to them (iOS or Android).

    Record keeping

    Providing you keep electronic copies of your paper receipts that are a true and clear reproduction of the original, you're not required to also keep the original paper receipts. Electronic copies of your receipts must show the:

    • name or business name of the supplier
    • amount of the expense, expressed in the currency in which it was incurred
    • nature of the goods or services
    • day the expense was incurred
    • day it is made out.

    Because it's your responsibility to ensure you keep legible records, we recommend that you regularly back up your records and keep a copy of your evidence (the photos) so you can substantiate your claims.

    Recording income in myDeductions

    You should only record income in myDeductions if you’re a sole trader with simple tax affairs – that is, you do not have primary production business or personal services income. Only your business income should be recorded.

    Any other income you've earned must be entered directly into your tax return, including:

    If you upload any other types of income apart from business income, the information will be pre-filled into the wrong sections of your tax return.

    How we access and use your myDeductions data

    The data is saved to your device and is not automatically sent to us. Your completed records (not including photos) will only be sent to us if you choose to upload from 1 July.

    We may use the myDeductions records you upload to verify the information in your tax return and for analytical purposes.

    Your record-keeping obligations do not change – you will still need to keep a copy of your data and any associated evidence, such as photos, to substantiate your claims.

    Recording car trips

    Trip recording options

    MyDeductions provides three tracking options for you to choose from to record your trips:

    GPS - your route is tracked to provide the distance you travel. If you lose GPS signal during the trip, myDeductions will estimate the route and distance. GPS may use more battery power and data than the other options, so you might consider the length of your trip first. This option is not available in a Windows phone.

    Point to Point - is used to work out the shortest route between the start and end locations you have entered. The distance in km is calculated and added to your record.

    Odometer - is the most accurate way to track your trip. You enter your start and end odometer readings into myDeductions. It works out the km travelled for you. You must use the odometer option if you are using the logbook method to calculate your work-related car expenses.

    If you make the same trips regularly, you can save them as a "favourite". Simply go to 'Add trip' and click on 'Add point to point trip'. Enter the details, remembering to click on the 'Save as a favourite trip' button. This trip will then be listed under 'Favourite trips' in the 'Add trip' section.

    Once you've made a favourite trip, you can click into the favourite trip and hit 'save' each time you make the trip.

    Alternatively, you can adjust the 'Record multiple trips?' number to add multiple trips at once (for example, if you make that particular trip three times every week, you could simply enter '3' as the number of trips at the start of the week).

    Recording trips when you are both an employee and a business owner

    If the trip is for your work as an employee, make sure the 'Is this trip for your business?' toggle is off. In the 'Purpose of trip' section, record the trip as one of two categories:

    • employee – work: select this if the trip is eligible to be claimed as a work trip
    • employee – self-education: select this if the trip is eligible to be claimed as a self-education expense.

    If the trip is for your business, make sure the 'Is this trip for your business?' toggle is on.

    Using a logbook when you are both an employee and a business owner

    You will need to record all your car expenses as a business expense. To do this ensure the 'Is this transaction for my business?' toggle is on when you add expenses and select 'Motor vehicle expenses' as the expense type.

    Recording a GPS or point-to-point trip – manual override

    The ATO app uses Google Maps to determine the addresses and distance travelled when using the GPS and point-to-point trip recording methods.

    If the address or distance details provided do not accurately reflect the trip you took, you can override these details by selecting 'Yes' to the question 'Manually enter address or km?' You can then manually update the addresses and kilometres.

    Creating a logbook

    When selecting ‘Start Logbook’ from the 'Add trip' screen, you will need to enter your selected vehicle’s starting odometer reading and the logbook start date.

    Entering your logbook start date will define the starting period for your logbook. Your logbook must then cover at least 12 continuous weeks in order to be valid. After this time, you can choose to stop your logbook at any time by selecting ‘Close logbook’ from the 'Add trip' screen.

    You will be required to enter your vehicle’s closing odometer reading. Upon pressing save (providing you have fulfilled the 12-week period and have entered the closing odometer reading) you will have created a valid logbook. Providing your logbook remains valid, you no longer need to record each trip. You will still need to record all relevant expenses relating to that vehicle if you wish to make a deduction claim for these expenses.

    Answering the field 'Is this travel you can claim' for self-education trips type

    When selecting self-education for the trip type, the question ‘Is this travel you can claim?' will appear on the screen underneath the trip details box.

    For work-related self-education, you can claim the cost of daily travel from your:

    • home to your place of education and back
    • work to your place of education and back.

    However, you can't claim the cost of the last stage of your travel from:

    • home to your place of education, and then to work
    • work to your place of education, and then to your home.

    Deleting or editing a vehicle

    If no trips or expenses have been added against a vehicle, then that vehicle can be edited in any way or deleted. However, once a trip or expense has been recorded against a vehicle, that vehicle will always be present in myDeductions (even in subsequent years or if you delete your records), and only certain fields can be edited.

    Uploading your data and lodging your tax return

    Before you upload, make sure your records are complete and accurate because you can only upload once for each financial year's tax return. Once you upload, you'll no longer be able to amend that year's information within myDeductions. You will, however, be able to amend the data in your tax return before submitting.

    Individuals have been able to upload myDeductions data since 1 July 2016 and sole traders can upload myDeductions data from 1 July 2017.

    You can only upload your business records if you're a sole trader with simple tax affairs. In this instance, 'simple tax affairs' means you do not have:

    Alternatively, you can email your tax agent a spreadsheet of your data using the Share via email function that will include the details of each entry.

    To access the upload function you'll need to make sure you have the latest version of the ATO app.

    Uploading data to lodge your tax return

    Uploading for the completed financial year will be available from 1 July each year. You'll need to ensure you have the latest version of the app downloaded to enable upload.

    Once you have finished recording your income and deductions, you can upload your completed data to us and we will pre-fill your tax return for you with the data provided. Your records will be available for pre-fill into your return, or for your agent to view, as soon as you've successfully completed your upload.

    Note: Only completed income, expense, trip and logbook data is uploaded, not photos.

    Your tax agent will also be able to use this information to lodge your tax return.

    Accessing and using the upload function

    You must have a myGov account that's linked to us and be using the latest version of the ATO app in order to upload.

    From the myDeductions home screen, simply select 'Settings', 'Upload to tax return', then follow the prompts.

    If the upload is unsuccessful, refer to Troubleshooting for individuals: Using the ATO app for more information.

    See also:

    Watch:

    How to create a myGov account and link to the ATO

    Checking your data after upload

    Whilst each record is uploaded, they may be added together so they can be pre-filled in your tax return.

    If you would like to check that your data has uploaded correctly and see what records went into each of the income and deduction labels, you can access the upload report from the app. Go to ‘Saved results’, which can be found by scrolling to the right of the icons on the ‘Home’ screen of the app.

    The report also shows the amounts uploaded, noting that some values may be rounded in myTax.

    You may wish to print or share the report to a computer or another device to compare your income or expenses to your prefilled data.

    Information your tax agent sees

    If you have uploaded your data, your agent will receive the same information that is available to you in myTax. Some of your income and expenses may have been consolidated in order to be pre-filled.

    If your agent would like a copy of your unconsolidated income or expenses you can send them a spreadsheet in CSV format.

    To send a spreadsheet via email to your agent:

    1. select ‘Settings
    2. select ‘Share via email’
    3. select the financial year you want to share
    4. select ‘Share data via email’. This will open your email and you can then input your tax agent's email address and send to them.

    If you want to send photos to your tax agent, you will need to make a back up within the app. The photos will be available in the .zip file that is created.

    Logging out of the app

    Once you have authenticated as part of the upload process your session will remain logged in unless there is no activity for 20 minutes, in which case the session will time out.

    Once you’ve completed the upload, if you select ‘done’ you will be logged out. If you select ‘Go to myTax’, you will be linked directly to the myTax form where your authenticated session will continue (but you will be logged out in the app).

    Removing records you've uploaded from your device

    You can delete most of your records. However, once a trip or expense has been recorded against a vehicle, that vehicle will always be present in myDeductions (even in subsequent years or if you delete your records).

    Before deleting your records, make sure you have a copy of your photos and data in case you later need to substantiate your claims. Remember that businesses must keep their records for at least five years (some records need to be kept longer).

    To delete your uploaded records from your device:

    1. select 'Settings'.
    2. select ‘Delete records
    3. select the financial year that you would like to remove and press ‘Delete’.

    Dealing with upload errors in myDeductions

    Refer to Troubleshooting for individuals: Using the ATO app if you are encountering errors during the myDeductions upload process.

    Other help on how to use myDeductions

    Help information explaining key concepts and functions within the myDeductions tool is available by selecting the '?' symbol at the top right of the screen in myDeductions.

      Last modified: 01 Jul 2018QC 46409