Just like that we’re coming to the end of the 2019 financial year!

If you haven’t already, you still have time to get yourself into some good habits and become a record keeping master! Come tax season you’ll be our favourite client and we can get your tax return done as efficiently as possible. Let’s take a look at some key concerns for individuals when it comes to keeping your records in check!

Any individual receiving employment income can claim a minimum of $300 in reasonable deductions for the year without having to substantiate it. However, the moment your deductions total over $300 you’ll be required to back up every single claim. So, how do you cover yourself?

Firstly, in order to claim a deduction you must meet the following conditions:

• The money was spent by you and was not reimbursed

• The expense must directly relate to your work

• You must have a record to prove it.

Receipts, Receipts, Receipts

This doesn’t mean a shoebox full of scrunched up and faded merchant copies…we honestly couldn’t think of anything worse. Instead, get with the times and go electronic! We love the cloud and you should too. The ATO will accept digital receipts as proof so long as they are readable, an original copy and have all the required information.

Here’s what your receipt should consist of:

• Name or business name of supplier

• Amount of the expense – written in the currency in which it was incurred.

• Nature of the goods/services

• Date the expense was incurred

During the year it’s as easy as spend, snap and save (or email me a copy to store!) Store any images of receipts in a folder ready for tax time and remember to back up whatever device you’re using so that you can hold onto the evidence for the required 5 years. Send through that folder to me and when I see you next, we’ll be all prepared!

Some common deductions to keep records of during the year include:

• Uniform or protective clothing

• Motor vehicle expenses – if you use your own car for work related travel check out my post “Motor Vehicle Deductions – What’s the deal?” for more detail

• Mobile phone & internet – a percentage of your bill can be claimed as work use.

• Donations – anything over $2 has the potential to be deductible.

Rental Properties

If you have any investment properties, be mindful that the more details we have the better. Often people may provide a figure for expenditure related to the property for the year but no detail as to what it was for exactly. To keep things simple, try and remember to hold onto the following:

• Rental income statements

• Invoices for any expenses related to the property – especially those for any repairs or maintenance.

• Depreciation report by a Quantity Surveyor

• Invoices for any capital purchases so that we can depreciate them over time.

Sole Traders

When you’re running a business, the best way to keep track of all your ins and outs is by using a software package like our trusty favourite – MYOB! You can speak to me about setting it all up for you at no extra cost!

Seriously… save yourself the time and hassle of having to create your own business summary. In saying that though, if you happen to be a wizard with spreadsheets, go for it! There’s nothing quite like receiving a beautifully detailed business spreadsheet from a client which has perfectly categorised expenses.

So, maybe organisation or spreadsheets aren’t your forte – don’t stress! There are tools available which can make record keeping a breeze.

ATO App & myDeductions

For those without an accounting software package, you may find your answer to record keeping within the app store. The ATO has developed their very own app (available on both Apple and Android platforms) which has an inbuilt tool called ‘myDeductions’. This helps individuals keep track of, you guessed it – their deductions! It also has the bonus of being able to record income for sole traders so you can throw those old school spreadsheets out the window.

This tool is great for people on the go, includes handy functions for tracking travel and even stores photos of your receipts to support your claims. Come tax time, the data can be directly shared via email from the app so we can receive all the information and supporting documents at once!

One thing to remember if using the app – you MUST remember to backup regularly to the cloud (for Apple users) or to Google Drive (for Android users) as the data is only stored on your device.

Ideally, if you stay up to date on all the little things the only documents you’ll need to track down at the end of the financial year are your PAYG Payment Summary and any annual statements (eg. private health insurance). Too easy!

Need more clarification as to what you should be keeping or the best way to keep your records in check?  Give us a call!