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BRISBANE ACCOUNTANTS / MORAYFIELD ACCOUNTANTS
RECEIPTS AND RECORD KEEPING FOR TAX
TAX RECEIPTS
Written evidence (receipts, invoices, etc.) must be kept for 5 years from the lodgement of the relevant income tax return.
Tax Receipts must have:
- Date of invoice
- Date the expenses were incurred
- Business name
- Nature of goods or services
- Amount in $AUS.
Bank and credit card statements can be used as receipts as per ATO Practice Statement LA 2005/7 if they have the description of goods and services on them, e.g., Officeworks, Bunnings, Sunglasses Hut, etc. plus a break up of expenses.
Google ATO substantiation expenses or ATO written evidence
TAX RECEIPTS SUBSTANTIATION EXCEPTIONS
$150 tax receipt exception for laundry or $1 per load.
$300 tax receipt exception for work expenses. This includes $150 for laundry but does not include allowances or motor vehicle tax set rate per kilometre method.
$200 tax receipt exception for expenses less than $10. This is on top of the $300 exception. This usually applies to small tools, office stationery and sundry
expenses. You must keep a note of the expense.
Home Office tax receipt exception for 34c per hour. You must keep a diary of hours per week for 4 weeks.
PROTECTIVE CLOTHING AND UNIFORMS
Tax deductions for protective clothing are generally deductible if it is designed to protect, steel capped boots, high visibility shirts, fluro trousers, non-slip nurses
shoes, aprons, etc. Conventional clothing is not deductible e.g. King Gee drill pants, jeans, etc unless they have a logo.
Tax deductions for compulsory uniforms are usually allowed as well as accessories such as stockings, footwear, socks and jumpers unless it is conventional clothing.
Non compulsory uniforms are usually not deductible unless registered with AusIndustry or they have a logo.
Google ATO protective clothing and uniforms
WORK V PRIVATE APPORTIONMENT OF EXPENSES USING 28 DAY DIARIES
Most work expenses that are incurred in producing assessable income are tax deductible and apportioned for private use if necessary.
A 28 day diary is required once every 5 years or where the work % changes by more than 10%.
Home Office tax deductions: Many clients calculate home office electricity based on floor area e.g. 10%. Other tax deductions are allowed for stationery, mobile, telephone, internet, computers, furniture, carpets, blinds, etc and apportioned for private use or you may use 34c per hour as per ATO tax ruling.
MOTOR VEHICLE EXPENSES
Travel to and from work is not a tax deduction.
Some exceptions are:
1. Carrying bulky equipment with no secure lockup at work.
2. Travelling sale representatives.
3. Some travel to a place of education.
4. Travel to attend meetings.
This only applies to motor vehicles whose carrying capacities are one 1 ton or less or fewer than 9 passengers.
Must be used for work purposes
Most of my clients use ‘set rate per kilometer method’ or ‘log book method’.
You may also use 12% of cost price of car (over 5,000 business kms) and 1/3 of actual expenses (over 5,000 business kms)
LOG BOOK METHOD
You must keep a log book for 12 weeks for each car once very 5 years.
You must start a new log book when you change cars or the business % changes by more than 10%.
You must have written evidence for depreciation, interest, repairs, insurance, registration, etc.
Exception is for fuel based on reasonable estimates of cost per business kilometres travelled.
E.g. 500 kms per tank with an average fill up of 50 litres = 10 kms per litre. Therefore 15,000 kms / 10 kms = 1,500 litres x $1.40 (average petrol cost per litre)
= $2,100
SET RATE PER KILOMETER METHOD
Motor vehicle tax receipt exception: ‘set rate per kilometer method’ between 68c per kilometer (based on engine size) x up to 5,000 kms. You must be
able to work out your estimate by using a diary or regular pattern of travel.
Google ATO work related car expenses
DISCLAIMER
The information provided in the above documents is not intended to be, nor should it be construed as tax advice. Any specific recommendation for a client can only be done after their individual circumstances have been determined by David Douglas Accountants.
We have clients from the following locations:
Brisbane, Albion, New Farm, Teneriffe, Newstead, Windsor, Wilston, Bowen Hills, Wooloowin, Herston, Lutwyche, Hamilton, Eagle Farm, Gordon Park, Fortitude Valley, Clayfield, Ascot, Hendra.
Morayfield, Burpengary, Caboolture, Bellmere, Wamuran, Narangba, North Lakes, Mango Hill, Kallangur, Dakabin, Deception Bay, Bribie Island, Elimbah, Kippa-Ring.
We do tax returns for individuals, trusts, companies, partnerships, contractors, ABNs and sole traders.
Liability limited by a scheme approved under Professional Standards legislation