Good record-keeping is the single biggest factor separating a strong, stress-free tax return from a rushed, incomplete one. However, most people aren’t entirely sure what actually needs to be kept, or for how long which often means either throwing away something important or holding onto boxes of paper that were never necessary.
Without proper records, a genuine deduction can be disallowed if the ATO ever asks for proof even years after the return was lodged. Consequently, the records you keep aren’t just for your own reference; they’re your protection if a claim is ever questioned.
Generally, records need to be kept for five years from the date you lodge your tax return, though this can extend further for certain items such as records relating to a capital gains tax asset, which should be kept for five years after the asset is sold. Therefore, it’s worth keeping property-related records for the full period of ownership, not just the year of purchase.
The ATO accepts digital copies of receipts and records, provided they’re a true and clear reproduction of the original. Consequently, a simple habit of photographing receipts as you go using a phone or a dedicated app is often far more reliable than trying to keep a physical folder organized all year.
Without documentation, a deduction can be reduced or disallowed entirely, even if the expense was genuine. Therefore, the safest approach is to treat record-keeping as an ongoing habit throughout the year, rather than a scramble the week before your appointment.
EBATS helps individuals and business owners set up simple, reliable record-keeping systems that make every future tax season easier.
📍 Suite 2.2/47 Queen St, Campbelltown NSW 2560, Australia 📞 0404 471 816 🌐 www.ebats.com.au 📧 [email protected]
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