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  • Record keeping – set the record straight

    To claim a deduction for work-related expenses:

    • you must have spent the money yourself and weren't reimbursed
    • it must be directly related to earning your income
    • you must have a record to prove it.

    You can only claim the work-related part of expenses. If an expense relates to both work and personal use, you must apportion use on a reasonable basis and only claim the work-related portion.

    On this page:

    Records you need to keep

    If you claim work-related deductions you must have records or be able to show how you calculated your claims.

    Records are usually a receipt from the supplier of the goods or services.

    The receipt must show the:

    • name of supplier
    • amount of expense
    • nature of goods or services
    • date the expense was paid
    • date of the document.
    Record keeping exceptions

    In some instances you may not need receipts, but you will still need to be able to show you spent the money and how you calculated your claim.

    Exceptions to the record keeping rules are there to make things simpler – they do not allow you to claim an automatic deduction up to the specified amount where the money has not been spent.

    Representative periods

    If your usual pattern of work use changes during the year, you may need to complete a new record. For example, if you change job and the work use of your internet changes you need to complete a new diary.

    Keeping your records

    You need to keep your records for five years from the date you lodge your tax return.

    If you are claiming for the cost of a depreciating asset that you have used for work – for example, a laptop – you must keep purchase receipts and a depreciation schedule, or details of how you calculated your claim for decline in value, for five years following your final claim.

    As we may ask that you produce your records during the five years, it is important that you have sufficient evidence to support your claims.

    Commissioner’s discretion

    If you are unable to obtain a receipt from a supplier, you can still claim a deduction if we are satisfied that the nature and quality of the evidence shows that you:

    • spent the money
    • are entitled to claim a deduction.

    Evidence can include bank statements or credit card statements which show the amount that was paid, and when and who it was paid to, as well as other documents which outline the nature of the goods or services provided.

    If you paid cash to a supplier and have no other documentation to support your claim, you will not have sufficient evidence to claim a deduction.

    myDeductions

    The records you keep don’t have to be in paper form. Records made and stored electronically are recognised as documents – this includes photos of your receipts.

    Keeping track of your records on the go is easy with the ATO app myDeductions tool.

    In myDeductions you can keep records of:

    • any work-related expenses (including car trips)
    • interest and dividend deductions
    • 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 agent.

    Download the app now – it’s free from your app store.

    See also:

    How the record keeping rules apply to different expenses

    Car expenses

    The type of car expense records you need to keep depends on whether you use the cents per kilometre method or logbook method to calculate your claim.

    Method 1: Cents per kilometre

    You don’t need receipts but you need to be able to show how you worked out your business kilometres (for example, by producing diary records of your work-related trips).If you use the cents per kilometre method, your claim is based on a set rate (68 cents per kilometre from 1 July 2018) for each business kilometre travelled. You can claim a maximum of 5,000 kilometres per car.

    If you borrowed a car or used a vehicle other than a car (for example, a motor cycle or a vehicle with a carrying capacity over one tonne, such as a utility truck or panel van) you cannot claim your expenses using either of the two methods.

    Instead, you need to keep all your receipts (such as fuel and repairs), and claim the work-related portion of these costs as a travel expense, not a car expense.

    Method 2: Logbook

    Your claim must be based on the percentage of work use of your car. To work this out you need to keep a logbook.

    Your logbook must:

    • cover a minimum continuous period of 12 weeks and be broadly representative of your travel throughout the year
    • include the purpose of every journey, odometer reading at the start and end of each journey and total kilometres travelled during the period
    • include odometer readings at the start and end of each income year.

    Your logbook is valid for five years, but you can start a new logbook at any time. If the work use of your car changes, you need to complete a new logbook.

    You can claim fuel and oil costs based on your actual receipts, or you can estimate the expenses based on odometer readings from the start and the end of the period in which you used the car during the year.

    You must keep:

    • original receipts for all other expenses for the car
    • details of how you calculated your claim for decline in value for your car, including the effective life and the method used.

    If your claim relates to the transport of bulky tools and equipment, you will need:

    • a record of all work items carried
    • the weight and size of all work items
    • evidence that the items carried are essential to your work
    • evidence that your employer provided no secure storage at the workplace.

    Remember to include on your tax return any allowances that you receive from your employer for car expenses.

    See also:

    Travel expenses

    There are specific record keeping requirements for travel expenses, depending on:

    • whether your travel allowance is shown on your payment summary
    • whether your travel was domestic or overseas
    • the length of your travel and your occupation.

    Travel records you should keep include:

    • a travel diary or itinerary, if your travel was for six nights or more
    • receipts for all meals, airfares, accommodation, car parking and tolls
    • an explanation of how the travel was work-related, the number of nights you slept away from home and the location.

    If your travel allowance is shown on your payment summary and you want to make a claim against it, you must have written evidence for the whole amount, not just the excess over the reasonable amount.

    Reasonable amounts for accommodation, meals and incidentals are provided to make record keeping simpler, not to provide an automatic deduction – you can only claim the amount you spent.

    Although you may not need records, you will still need to show how you calculated your claim.

    See also:

    Clothing, laundry and dry-cleaning expenses

    Clothing

    You need to keep receipts to claim for the purchase of occupation-specific clothing, protective clothing, or unique and distinctive uniforms.

    Laundry

    To claim a deduction for laundering occupation-specific clothing, protective clothing or unique and distinctive uniforms, you must keep details of how you calculated your claim.

    Dry-cleaning

    If you use a dry-cleaning service for the clothes, you need to keep receipts.

    If your laundry claim is under $150, you do not need to keep records.

    Although you may not need records, you will still need to be able to explain how you calculated your claim.

    See also:

    Phone and internet

    Claiming $50 or less

    If the work use of your phone is incidental, and you are not claiming a deduction of more than $50, you may make a claim based on the following:

    • 25 cents for each work call made from your landline
    • 75 cents for each work call made from your mobile
    • 10 cents for each text message sent from your mobile.

    Claiming more than $50

    To claim a deduction of more than $50 you must:

    • keep all your phone and internet bills for the year
    • show how much is related to work.

    If your bills are itemised

    Highlight all your work-related calls in a representative four-week period which can then be applied to the full period.

    Bundled plans

    If you have a bundled plan, you can keep a diary covering a representative four-week period showing how often you use each service for work. This pattern of work use can then be applied to the full working period.

    To determine your work use you can record:

    • internet    
      • the time you spent, or data used for work purposes compared to your private usage and that of all members of your household
       
    • phone    
      • the number of work calls made as a percentage of total calls
      • the amount of time spent on work calls as a percentage of your total calls.
       

    See also:

    Working from home

    When claiming running costs for your home office (such as electricity and home office equipment) the types of records you need to keep depends on the method you use to work out your claim – fixed rate or actual costs.

    Fixed rate

    If you are using the fixed rate method (52 cents per hour from 1 July 2018), either keep records of your actual hours spent working at home for the year, or keep a diary for a representative four-week period to show your usual pattern of working at home.

    Actual costs

    If you are claiming the actual costs you have incurred, keep your receipts for items you will claim outright (for example, receipts for stationery or statements for electricity and gas).

    See also:

    Self-education expenses

    You must keep receipts for all self-education expenses, including course fees, text books, stationery and travel expenses.

    You must also be able to explain how the course directly related to your employment at the time of study.

    If you are claiming the portion of a depreciating asset that you have used for self-education – for example, a laptop – you must keep receipts and a depreciation schedule, or details of how you calculated your claim for decline in value.

    See also:

    Specific records required for depreciating assets

    Some items, like a computer or car, have a limited life expectancy (effective life) and are expected to depreciate over time or decline in value.

    You must keep receipts that show the:

    • name of supplier
    • cost of the asset
    • nature of the asset
    • date you acquired the asset
    • date of the document.

    You also need to be able to show:

    • the date you first started using the asset for work-related purposes
    • the effective life of the asset (how long an asset can be used for). If you have not adopted the effective life determined by us, you will need to show how you worked out the effective life
    • the method used to work out the decline in value
    • how you have calculated the percentage of work use.

    The depreciation and capital allowances tool will help you claim a decline in value deduction for a depreciating asset and assist you with some of these record keeping requirements.

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      Last modified: 30 Jun 2020QC 59240