Show download pdf controls
  • Keeping your tax records

    The Australian tax system relies on taxpayers self-assessing. This means you are responsible for working out how much you can declare and claim on your tax return. You also need to be able to show how you arrived at these figures – in some cases, you may be required to provide written evidence.

    In order to prepare an accurate tax return and support the claims you make, you need to keep careful records. The records you need to keep depend on your situation, but as a rule, it is better to keep too many records than not enough.

    On this page:

    The importance of keeping records

    Keeping good records helps you and your tax adviser:

    • to provide written evidence of your income and expenses
    • to help you or your tax agent prepare your tax return
    • to ensure you are able to claim all your entitlements
    • in case we ask you to prove the information you provided in your tax return
    • reduce the risk of tax audits and adjustments
    • improve communication with us
    • resolve issues relating to disputed assessments or adjustments
    • avoid exposure to penalties.

    Reasons for keeping good records are to reduce the cost of managing your tax affairs. If your records are accurate and organised, you may be able to manage your own affairs via ATO Online services. If you use a tax advisor, reducing the time they spend sorting and preparing your records will give them more time to ensure you get what you are entitled to.

    See also:

    How long to keep your records

    Generally, you must keep your written evidence for five years from the date you lodge your tax return.

    There are some more specific situations. If you:

    • have claimed a deduction for decline in value (formerly known as depreciation) – keep records for the five years from the date of your last claim for decline in value
    • acquire or dispose of an asset – keep records for the five 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
      • five years from the date you lodge your tax return or
      • five years from the date the dispute is resolved.
       

    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 incurred the expense outside Australia.

    Types of records you should keep

    You should organise your records into these categories:

    You may also need to keep records in some other categories, or for other family members – for example, if you receive the family tax benefit.

    In some cases, you may choose not to keep particular records – for example, because you expect to claim for only a small amount of business travel. However, keep in mind that if you actually travelled more than you expected during the year, but don’t have all the records, you may not be able to claim for the extra travel.

    As a rule, it is best to keep a record of all income and expenses. At tax time, you can decide what you do and don't need.

    If you incur expenses for private purposes, you must have records that show how you worked out the amount of any private use.

    Payments you've received

    You need to keep written evidence for payments you have received, such as:

    Salary, wages and allowances

    Evidence can include:

    • your Pay as you go (PAYG) payment summary – individual non-business (previously known as a group certificate)
    • your income statement (the equivalent of PAYG summary) if your employer reports to us through single touch payroll (STP)
    • a signed letter or statement from your payer, which provides the same information as a payment summary, if you don't have a payment summary.

    Income from interest, dividends, managed funds or rental properties

    Evidence can include:

    • statements, passbooks or other documentation from your financial institution showing the amount of interest you received
    • statements from the company, corporate unit trust, public trading trust or corporate limited partnership that pays dividends or makes distributions to you. These records should show
      • the amount of franked and unfranked dividends
      • the amount of franking credits
      • any tax file number amounts withheld from unfranked dividends
       
    • statements or advice from managed funds showing the amount distributed to you. The statement should show details of
      • 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 of the rent you received, such as
      • a statement from your property agent
      • a rent book or bank statements showing rental payments transferred into your account
      • records of any bond money retained in place of rent.
       

    Government benefits and pensions

    Evidence can include:

    • your PAYG payment summary – individual non-business (previously known as a group certificate)
    • your income statement (the equivalent of PAYG summary) if your employer is reporting to us through single touch payroll (STP)
    • a letter from the agency that pays you, showing the amount you received.

    Other pensions or annuities

    Evidence can include your:

    Expenses related to payments you received

    You need to keep records for the expenses you claim.

    Find out about:

    Car expenses

    There are two methods you can use to work out your car expenses:

    Both methods require you to know (or estimate) the kilometres you travel for business. If you can't estimate your business kilometres at the start of the year, you should keep records as required by the logbook method. Logbook method allows you to claim deductions greater than 5,000 business kilometres.

    Cents per kilometre method

    You need records, for example, diary entries, showing how you calculated the kilometres you travelled for business.

    See also:

    Logbook method

    Your logbook is valid for five years. That is, a new logbook is required every five years. If this is the first year you are using the logbook method (or the five years has expired), you must make records in your logbook for this year covering at least 12 continuous weeks (the logbook period) and show:

    • when the logbook period begins and ends
    • the car’s odometer readings at the start and end of the logbook period
    • the total number of kilometres travelled in the logbook period
    • the number of kilometres travelled for work activities based on journeys recorded for the period in the logbook. You need to record the start and finishing times and the odometer readings at the start and end of the journey, kilometres travelled, and the reason for the journey
    • the business-use percentage for the logbook period.

    Then, in each of the four years following the first year, you need to keep:

    • odometer readings for the start and end of the full period being claimed
    • business usage percentage based on the logbook

    Keep receipts or other documents showing:

    • fuel and oil expenses, or a reasonable estimate based on odometer readings
    • other expenses for your car – for example, registration, insurance, lease payments, services, tyres, repairs, interest charges.
    The following table sets out some of the rules about keeping logbooks in different circumstances:

    Circumstance

    Rule

    First year of using logbook

    You must keep logbook records for at least 12 continuous weeks during this income year.

    Using the car for less than 12 weeks before the end of the income year

    You should continue to make records in the same logbook in the following income year so that your logbook covers the required 12 continuous weeks.

    Keeping logbooks for two or more cars

    The same rules apply for each car.

    See also:

    Travel expenses

    The records you need to keep for travel depend on your length of stay and whether you have received a travel allowance. Where you receive a travel allowance, and you restrict your claim to the reasonable amount we advise each year, you do not need to keep written evidence of your expenses. See TD 2018/11 Income tax: what are the reasonable travel and overtime meal allowance expense amounts for the 2018-19 income year?

    Evidence you need to keep may include:

    • a travel diary – showing the dates, places, times and duration of your activities and travel
    • records of your travel expenses, such as invoices, receipts or other documents showing the expense
    • records of travel allowances received
    • records of costs (such as petrol, repairs and maintenance) for using a car other than your own
    • records of expenses for using vehicles other than cars, such as      
      • motor cycles
      • utilities or panel vans with a carrying capacity of one tonne or more
      • any other vehicle with a carrying capacity of nine or more passengers
       
    • records of costs such as fares for air, bus, train, tram and taxi/rideshare travel, bridge and road tolls, parking and car-hire fees.

    See also:

    Work-related clothing, laundry dry-cleaning expenses and sun protection

    Evidence you need to keep may include:

    • records of expenses for uniforms and protective clothing specific to your occupation
    • records of sun protection item costs
    • records if claiming laundry costs greater than $150
    • a basis for your claim for laundry costs of less than $150
    • records of dry-cleaning costs.

    See also:

    Work-related self-education expenses

    Evidence you need to keep may include:

    • records of expenses such as course fees, textbooks, stationery, decline in value of and repairs to depreciating assets
    • records of your travel expenses for work-related self-education.

    See also:

    Other work-related expenses

    Records you need to keep may include:

    • evidence of other work-related expenses – for example, a diary maintained over a representative four-week period to support the percentage of computer home office costs
    • evidence showing expenses related to the costs of assets against which depreciation claims will be made
    • pay as you go (PAYG) payment summaries showing items such as union fees and overtime meal allowances.

    See also:

    Rental expenses

    Evidence you need to keep may include:

    • documents such as bank statements showing the interest charged on money you borrowed for the rental property
    • loan documents
    • records of other expenses for your rental property – for example, advertising, bank charges, council rates, gardening, property agent fees, and repairs or maintenance
    • documents showing details of expenses related to the decline in value of depreciating assets or any capital work expenses, such as structural improvements.

    See also:

    Local government councillors

    If you are a local government councillor and your local governing body has decided that its members be subject to the pay as you go withholding system, you will be treated as an employee for tax purposes. Therefore, you will be required to keep written evidence of the work-related expenses and car expenses associated with carrying out your duties as a councillor.

    Asset acquisition or disposal

    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.

    There is a wide range of CGT events but the most common occur when you sell or give away an asset. You should keep records showing:

    • the date you acquired and or sold an asset, such as
      • contracts for the purchase or sale of an asset (such as real estate or shares)
      • dividend reinvestment statements from your unit trust or managed investment fund
       
    • the date the capital gains tax (CGT) event occurred
    • the amount and date of any expenditure on that asset, for example, council rate notices for a vacant block of land
    • any net capital losses from previous years that have not been applied. You may be able to offset these against capital gains in this year.

    See also:

    Gifts, donations and contributions

    Evidence you need to keep may include:

    • receipts for donations or contributions
    • your PAYG payment summary – individual non-business (previously known as a group certificate) where you make donations to eligible organisations through your pay
    • your income statement (the equivalent of PAYG summary) if your employer uses single touch payroll (STP) where you make donations to eligible organisations through your pay
    • a signed letter from the eligible organisation confirming the amount of your donation or contribution. Where you receive a minor benefit (for example, a charity dinner) as a benefit for your contribution, the value of the benefit needs to be shown.

    See also:

    Disability aids, attendant care or aged care expenses

    Evidence you need to keep may include:

    • receipts or other documents to show the medical expenses you are claiming – for example, payment for prosthetics or a wheelchair
    • receipts from an approved care provider for in-home care expenses
    • documents for any payments made to residential aged care facilities
    • statements from the National Disability Insurance Scheme (NDIS) or a private health fund.

    You should keep documents that relate to you, as well as for your dependants. This generally refers to your spouse and children, but may also include other dependants. See also:

    Lost or destroyed records

    If your records are accidentally lost or destroyed, for example during a burglary or a disaster, you may be able to claim a deduction for certain expenses if:

    • you can provide a complete copy of the lost or destroyed records or
    • we are satisfied that you took reasonable precautions to prevent the loss or destruction and it is not reasonably possible to obtain a copy of the records.

    See also:

      Last modified: 27 Jun 2019QC 16788