Records you need to keep
Work out what format your records need to be in, how long to keep them and when you need them.
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What is a record
Records are written evidence of your income or expenses that can be in paper or electronic form. You will receive documents that are important for doing your tax during the income year.
You need to keep records for 5 years (in most cases) from the date you lodge your tax return. Records may include income statements, payment summaries and receipts.
Records you need will differ depending on whether they are for:
You need to keep specific records that support the claims and declarations you make as the Australian tax system relies on taxpayer's self-assessment.
Records for payments you receive
For income you receive from salary, wages, allowances, government payments or pensions and annuities your records may include:
- your income statement if your employer reports to us through single touch payroll (STP)
- your Pay as you go (PAYG) payment summary – individual non-business
- a signed letter or statement from the payer, that provides the same information as an income statement or payment summary
- your PAYG payment summary – superannuation income stream.
For income you receive from interest or managed funds, your records or evidence may include:
- statements, passbooks or other documents from your financial institution that show the amount of interest you receive
- statements or advice from managed funds that show
- the amount of your distribution
- the amount of any primary production or non-primary production income
- any capital gains or losses
- any foreign income
- your share of any credits, such as franking credits.
Records for expenses
For most expenses you need a receipt or similar document as evidence of your expenses. To claim a deduction for a work-related expense, as an employee:
- you must have spent the money and you weren't reimbursed
- the expenses must directly relate to earning your income
- you must have a record to prove it (usually a receipt).
You will also need to be able to show how the expense relates to earning your income. For information about the specific records you need, see:
You can only claim a deduction for the work-related portion of an expense. You can’t claim a deduction for any part of an expense that doesn't directly relate to earning your income or that is private.
If your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims.
If you are claiming the decline in value of a depreciating asset you have used for work, such as a laptop, you must keep records for 5 years following your final claim, including:
- purchase receipts and a depreciation schedule
- details of how you calculated your claim for decline in value.
We may ask that you show us your records during the 5 years. It is important that you have sufficient evidence to support your claims.
Records for assets
If you acquire a capital asset you may make a capital gain or capital loss if you sell the asset in the future. To ensure you don’t pay more tax than necessary, keep good records from when you buy the asset.
This may include income you receive from an investment property or dividends from shares.
For information about the specific records you need, see:
Record for local government councillors
As a local government councillor, you may also be an employee. You're an employee if your local governing body decides to subject its members to the pay as you go withholding system.
If this is the case, you need to keep written evidence of the work-related and car expenses you incur in carrying out your duties as a councillor.
Format of your records
You can keep your records in paper or digital format. If you make paper or digital copies, they must be a true and clear copy of the original.
We recommend you keep a back-up of all your digital records.
Your documents must be in English unless you incur the expense outside Australia.
If you claim a deduction, you must have records to show how you work out your claims. Records are usually a receipt from the supplier of the goods or services. A receipt must show the:
- name of the supplier
- amount of the expense
- nature of the goods or services
- date the expense was paid
- date of the document.
The importance of keeping records
Keeping good records helps you and your tax adviser:
- to provide written evidence of your income and expenses
- prepare your tax return
- to ensure you are able to claim all your entitlements
- prove the information you provide in your tax return (in case we ask you)
- reduce the risk of tax audits and adjustments
- improve communication with us
- resolve issues that relate to a dispute of your assessments or adjustments
- avoid exposure to penalties.
Keeping good records reduces the cost of managing your tax affairs. If you use a tax advisor, you can reduce the time they spend sorting and preparing your records. This will give them more time to ensure you claim your entitlements.
If you incur expenses that you use partly for private purposes, you must have records that show how you worked out the part of expenses that you incur in earning assessable income.
For more information, see PS LA 2005/2 Penalty for failure to keep or retain records.
How long to keep your records
Generally, you must keep your written evidence for 5 years from the date you lodge your tax return.
There are some more specific situations. If you:
- claim a deduction for the decline in value of depreciating assets – keep records for the 5 years from the date of your last claim for decline in value
- acquire or dispose of an asset – keep records for the 5 years after it is certain that no capital gains tax (CGT) event can happen
- are in dispute with us – keep records for the later of either
- 5 years from the date you lodge your tax return
- 5 years from the date the dispute is resolved.
Keeping digital records with myDeductions
Our myDeductions tool is a record-keeping tool you can use to keep track of your records digitally. Using the myDeductions tool makes keeping your records including photos easier.
We recognise documents you store digitally, including photos of your receipts as records.
Sole traders with simple affairs can also use it to help keep track of their business income and expenses.
You can upload your records from the myDeductions tool and pre-fill your myTax return. If you use a registered tax agent, you can also email your records directly to them.
The myDeductions tool allows you to keep your records for:
- all work-related expenses (including car trips)
- interest and dividend deductions
- gifts or donations
- costs of managing tax affairs
- sole trader expenses and business income
- other deductions.
Watch: A quick demonstration of myDeductions
Record keeping exceptions
Record keeping exceptions are available to make things simpler. Exceptions don’t allow you to claim an automatic deduction.
Exceptions exist for:
In some circumstances you may not need receipts, but you still need to show:
- you spent the money yourself
- how you worked out your claim.
Small and hard to get receipts
You don’t have to get and keep a receipt for expenses:
- that are $10 or less, as long as your total claim for small expenses is $200 or less
- where you are unable to get a receipt from a supplier.
You can still claim a deduction if the nature and quality of your evidence shows you spent the money and are entitled to claim a deduction. Evidence can include:
- a bank or credit card statement that shows
- the amount that was paid
- when and to who amounts were paid.
- other documents that outline the nature of the goods or services
- a written record in your work diary.
If you pay cash to a supplier and have no other documents to support your claim, you will not have sufficient evidence to claim a deduction.
Lost or destroyed records
If your records are accidentally lost or destroyed, you may be able to claim a deduction for certain expenses. For example, your records are stolen during a burglary or destroyed in a disaster. You can claim a deduction if you can either:
- provide a complete copy of the lost or destroyed records
- satisfy us that you took reasonable precautions to prevent the loss or destruction and it's not reasonably possible to get a copy of the records.
We may also be able to help you with Reconstructing your tax records.
For more information on the relief from the effects of a failure to substantiate expenses, see TR 97/24 Income tax: relief from the effects of failing to substantiate.
Work out what format your records need to be in, how long to keep them and when you need them.