Written Evidence Rule for claims over $300

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You must have written evidence to prove your deduction claims if total claims exceed $300. The records you keep must prove the total amount, not just the amount over $300.

The $300 limit does not apply to claims for car, meal allowance, award transport payments allowance and travel allowance expenses. There are special written evidence rules for these claims (such as the logbook for car allowances). 

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When your claim is less than $300

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If the total claimed is $300 or less, you need to be able to show how you calculated your claims. So you are not required to hold onto written evidences.

However, you are not eligible for $300 worth of deductions automatically. If you didn’t actually incur the expenses – and can’t show how you calculated the amount of your deduction – you can’t make a claim.

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What do you mean by “Written Evidence”?

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Written evidence can be:

• Invoice or receipt from the supplier of the goods or services, showing  the name of the supplier, the amount of the expense, a description of the goods or services purchased and the date the expense was incurred

• Evidence you have recorded yourself:

  • For expenses of $10 each or less where the total of these expenses is $200 or less, or where you have been unable to obtain written evidence - for example, for toll or parking fees where you can’t get a receipt.

  • Your records must show the same details as a document from a supplier as described above.

 

In addition to above a bank or credit card statement can be acceptable substantiation in most cases.

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Timeline for maintaining records 

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You must keep your written evidence for five years from 31 October following the end of the tax year or, if you lodge later, for five years from the date you lodge your tax return. If at the end of this period you are in a dispute with the ATO that relates to a work expense, you must keep the relevant records until the dispute is resolved.

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For depreciating assets/capital purchases, you must keep records for the entire period over which you claim deductions for the decline in value of those assets. You must keep your records for a further five years from the date of your last claim. The five years start on 31 October following the end of the tax year or, if you lodge later, from the date you lodge your tax return. This period is extended if, when the five years end, you are in a dispute with the ATO that relates to a depreciating asset.

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If you carry forward a tax loss, you must keep the records until the end of any period of review for the income tax return in which the loss is fully deducted.

If you own an asset which will be subject to capital gains tax on disposal, you will need to keep records covering the entire period of ownership until 5 years after lodgment of the tax return recording the disposal of the asset.

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Use of technology in record management

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ATO allows electronic copies, a photo from mobile phone will do. So you do not need to hold on to all your fuel bills at least. Its efficient and can easily keep a track on your spending also

 

 

Our next step is to provide a personal login for each of our valuable clients and allow a space to manage their records!

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