In a world of electronic communication and the paperless society, it’s important to remember that in order to meet your tax obligations, you must hold certain records. Thanks to digitalisation, you no longer need to keep a shoe box full of receipts – rather, you can use an app to track tax receipts. Thanks to MyGov, you likely won’t have received a paper PAYG Payment Summary (now called an Income Statement) either. It’s really important to keep all your tax records, both electronic and paper, to support the contents of your tax return.
The guidance from the ATO is that you must keep your tax records for 5 years from when you lodge your tax return, just in case the ATO audit you. The ATO advises that the records you need to keep include:
- payment summaries, including your employer and the Department of Human Services
- statements from your bank and other financial institution showing the interest you’ve earned
- dividend statements
- summaries from managed investment funds
- receipts or invoices for equipment or asset purchases and sales
- receipts or invoices for expense claims and repairs
- tenant and rental records.
If your total claim for work-related expenses is more than $300, you must have written evidence to prove your claims.
If you acquire a capital asset (property, shares) you are advised to collate records from the outset because if you sell the asset in the future, capital gains may apply.
As your accountant, we may need you to share your records with us from time to time. We’ll let you know when and what is required in advance.