Yay! It’s the Financial New Year! Said only a very small number of people ever, and that was quietly, without witnesses, in the privacy of some type of lair. The rest of us only realise that it’s snuck up on us again when the retail sector starts advertising EOFY Stocktake sales, which is a little odd, given that after death, taxes are the only other certainty in life.
This year, instead of listing tax tips that may or may not be applicable for the next financial year, I’ve decided to give a few tips for maintaining Records and Receipts as this really is one of the main concerns Individual taxpayers have, and a constant pain for small businesses.
1. Know what you can claim.
Knowing what you can actually claim for your work related expenses before you start collecting every receipt you can like it’s some sort of Pokemonesque game will save a lot time and effort. Ask your accountant or just visit the ATO website if you don’t know (be sure to check that it relates to your job, not just that it is available to someone somewhere) and don’t just assume that what you heard at work is fact (unless you work at the ATO).
2. Keep electronic copies.
We all know that thermal receipts fade to nothing in the blink of an eye in our climate, and a blank piece of paper doesn’t make the grade in the ATOs eyes. There are numerous Tax Apps available to help with this, from simple ones that just store images taken with your phone, through to more comprehensive ones that are run by accounting firms that provide tips and advice. Some even facilitate your Tax Return. If these options seem a bit too much there is always the email method. Create a “Receipts” folder in your email program, then take a photo of your receipts on your phone and share them to your email and drag the image into the Receipts folder.
Vehicle logs have been around forever, but still seem to confuse people. To claim a work related percentage of all of your vehicle expenses you need to keep a comprehensive log of all of your vehicle use for THREE months. OR you can claim a cents per Km deduction by keeping a record of all of your work related trips. Vehicle log books are available at most newsagents for a few dollars and again, there are numerous vehicle log Apps available, from simple manual entry models through to GPS enabled trackers.
Did you know that you now have to keep a PHONE LOG if you want to claim the expense? You need to keep a log for four weeks (good for three years) which is easy if you get an itemised bill, but a bit more involved if you use a pre-paid service.
These are just a couple of simple things that constantly confuse people, but as with all tax tips and advice, it is essential to understand that TAX RULES and REGULATIONS change constantly. If in doubt, please seek professional advice.