How To Keep Tax Records To Maximise Your Tax Deductions

Tax time seems to sneak up quickly every year which means that many Australians engage in a last ditch attempt to battle through bank statements, rifle through invoices and squint at receipts. If you spend most of the year ignoring the approaching tax dates, you might struggle to find everything you need to maximise your tax refund.

The key to a bigger tax refund is to be organised!

The ATO has three golden rules when it comes time to claim your tax deductions:

  1. You must already have spent the money
  2. Your expense must be work-related
  3. You must be able to prove your claim

Pro Tax Tip: No proof – no claim!

The difference might add up to hundreds, if not thousands of dollars. We’re sure you don’t want to stand at the ATO’s front door and shove through wads of your cash through their mail slot, but not maximising your tax return is just about the same thing.

The ATO might have golden rules when it comes to claiming tax deductions, but so does ITP. Your money – your pocket! In fact, our tax agents spend their professional lives working out ways to reduce their client’s tax money.

If you think you can’t maximise your tax return, think again. There are traits ITP Tax accountants see time and again where people lose out big time simply because they don’t have the right records. It’s such a simple fix, they thought they’d let you know what you have to do.

What Proof Do You Need?

It’s not like you need the prime minister to sign a copy of the Australian constitution. The proof you need is a little easier to access.

First up, you’ll need records of the income you’ve received throughout the year. This is not limited to salary and wages. You might earn an income through bank interest, foreign income or a trust account. You’ll need to gather everything up to work out your total.

The following income streams are your most common:

  • Wages and salary
  • Investments
  • Dividends
  • Managed funds
  • Allowances
  • Rent from rental properties
  • Income from letting a room
  • Bank interest
  • Income from a trust account.

Pro Tax Tip: Your ITP Tax Agent can access your income data for you using your tax file number. They’ll be able to see your Pay As You Go (PAYG tax) paid, allowances paid to you through your employers and your superannuation.

Claim Everything You’re Entitled To

Once you have your total incomings worked out, now you can start to work out where you can find deductions. Although your ITP Tax Accountant will guide you through the whole process, it’s good to know generally where you can cut your tax and what proof you need to back yourself up.

Pro Tax Tip: Your ITP Tax Accountant is available all year round to help! If you’re not sure what expenses you can claim, just give them a call and they’ll guide you through what you’ll need to do. Any fees you might pay to a tax agent are tax deductible.

General Expenses

There are general expenses you’ll incur to keep your tax affairs organised that most people completely overlook! Expenses such as your tax agent’s fees, income protection costs, charity donations and private heath covers are valid claims. Did you remember all of those? Your tax accountant will.

General Work-Related Expenses

Think about professional membership fees, subscriptions, licenses, union fees and gifts. These costs are easy to forget but they all add up.


Do you stay on top of your game and keep your skills up to date? Course fees, books and stationery, travel to and from your learning institution, accommodation and meals and library fees can be claimed if your course directly relates to your income. You can also claim first aid courses, and other short courses you need to perform your job.

Working From Home

Due to COVID19 many more people are performing their duties from home. Items such as stationery, desk chairs and computers, laptops and electronic items, your phone, carry-cases and brief cases are items that can be claimed.

Remember your running costs, such as phone and internet fees, heating and cooling, a portion of the rent you pay if you have a dedicated office.


Do you need safety items such as boots, high-vis vests, hats, safety glasses or any protective clothing. If you work outside, you’ll even be able to claim sunglasses. The tools of your trade can be depreciated or written off.

You can also claim laundering your work clothing

Work-Related Travel

If you’ve incurred costs such as accommodation, meals, road tolls and parking fees, vehicle costs, flights, taxis and the like for your work – keep those receipts.

Pro Tax Tip: You might need to keep a travel diary or log book. A quick call to your tax agent can clear up what you’ll need to do.

Claims Less Than $300

It your total claims add up to less than $300, you’ll need to show how you calculated your expenses, but you won’t need written evidence. This isn’t an ‘automatic’ deduction. You will need proof, such as a work diary or similar, not just a strange looking subtraction calculation. It won’t wash with the ATO and one of the jobs of a tax agent is to keep you out of hot water with the ATO. That’s not the kind of attention you don’t want.

Claims Over $300

For claims that total over $300, you’ll need proof!

Pro Tax Tip: The $300 limit does not apply to expenses from your car, meal allowances, award transport payment allowances or any travel allowances. You’ll need a separate logbook.

Written Evidence

The ATO required written evidence of a certain nature when accepting your claims. Written evidence can be:

  • A document (invoice or receipt) from a supplier of goods or services that show: their name, the amount, a description of the good or service, the date of the expense and the date of the document.
  • If your expense was $10 or less and you couldn’t get evidence (such as a tool or parking fee), you can records your expense, but you must keep the same details as you would on a receipt or invoice and the total must not be more than $200.

In most cases a receipt or invoice will be OK.

Pro Tax Tip: You don’t need to fill up a filing cabinet and keep your paper copies! You can keep electronic copies as long as they are a clear and true representation of the original.

How Long Do You Need To Keep Records

Did you know that ATO can ask to see your receipts up to five years from the date of your lodgement? That’s a long time. It’s also a long time to remember what expense you did occur, which is why it pays to be organised.

For depreciating assets, you must keep records for as long as you depreciate the asset and claim deductions. You must keep your receipt for a further five years from the date of your last claim.

That’s basically it – in a nutshell or course. There’s much more to it than that, but that’s why you reply on a tax accountant. Of course there is more to tax and everyone’s situation is unique. If you have any questions, phone your tax agent who can shed some light on what you need to do. Their advice is as good as gold – or money back in your pocket. Literally! They truly are the profession that pays for themselves.

Phone 1800 367 487 today or book online at