Do you have a valid tax deduction, but you just don’t know where that receipt has gone? Maybe you accidentally threw it out with some papers. Maybe it dropped out of your wallet. Maybe it saw a bit too much sun and the ink faded. The simple fact is you have incurred a valid work cost. You want to deduct it as an expense. But there’s no way you can get another receipt. Thankfully, there are still some options available to you.
If you’ve been wondering what you can claim on tax without receipts, read on for all the details.
Three golden rules for claiming deductions
The Australian Taxation Office (ATO) has three golden rules when it comes to claiming tax deductions:
- You must have spent the money yourself and not been reimbursed;
- The expense must be directly related to earning your income;
- You must have a record to prove it.
In other words, you can only claim a deduction for an expense you personally paid for and that is directly related to your job or business. Rule number three dictates that you must also have a record. However, it doesn’t have to be a receipt. There are other ways to support the claim.
It’s important to note that if you don’t have a receipt for an expense you want to claim, it can be challenging to meet the ATO’s requirements. However, the impact of not having a receipt will vary depending on the nature of the deduction.
Pro Tax Tip: When claiming deductions for work-related expenses, you can only use expenses that are directly related to earning your income. Any expenses that are not clearly related or are of a personal nature cannot be claimed. If you want to gain a better understanding of what qualifies as a tax deduction, check out our complete guide to how tax deductions work.
So, how can I claim without receipts?
While receipts are the preferred method of proof, there are other ways you can confirm that you incurred a claimable expense. Below, we’ve broken down all the acceptable records you can use.
According to the ATO, bank statements can often be accepted as a substitute for receipts. However, the statement must clearly list the purchase amount and include a description. If you have a photograph of the item’s packaging that confirms the purchase amount, that can further strengthen your claim.
Do you have a purchase that contains some items eligible that are for deductions and some that aren’t? You’ll need a way to distinguish between them, such as photographs or annotations on the statement.
An income statement may be a good source of information. Your tax agent can review your income statement for certain reoccurring deductions. For example, union fees that are paid out of your weekly pay are often listed as a line item on your income statement. This means you may be able to include them as deductions on your tax return, which can reduce your taxable income and result in a larger refund.
Have you made a significant purchase but lost the receipt? It’s worth asking for a replacement receipt so you can safely include the expense in your tax return. One way to do this is to check your email or online banking account, as many retailers will send an invoice electronically that can be downloaded. If the purchase was made in-store, contact the retailer and ask if they can provide you with a duplicate receipt based on their records.
If you use your personal vehicle for work-related purposes, you may be able to claim the cost of petrol as a tax deduction, even if you don’t have receipts. The ATO allows you to claim petrol at a nominal rate per kilometre. This rate varies depending on the size of your vehicle. And you must provide evidence of the number of work-related kilometres you travelled through a logbook.
The ATO allows you to claim up to 5,000 “business kilometres” per financial year for work-related vehicle expenses. There are two methods to calculate this deduction: the logbook method and the cents per kilometre method. Let’s take a quick look at both methods.
The logbook method
This form of record-keeping involves maintaining a logbook of your kilometres travelled. You also need to record odometer readings and take notes about the car’s usage. You can claim expenses such as running costs and depreciation in the car’s value. These must be based on when the car was originally purchased and its depreciated value according to the ATO’s depreciation rates. Your logbook must have continuous records of use for a period of at least 12 weeks.
For fuel and oil expenses, you can either use receipts or estimate the cost based on odometer readings and the fuel consumption rate of your vehicle.
The cents per kilometre method
This method involves calculating your deductions based on the rate for the relevant financial year. For 2022, the rate was 72 cents per kilometre. In the 2023 financial year, this rate has increased to 78 cents per kilometre. You do not need receipts for this method. However, you will have to provide written evidence of your work-related trips in the form of a journal. You may also need to provide written evidence to show how you worked out your business kilometres. If the car is shared by a joint owner who’s also claiming business use, you’re both entitled to claim 5,000 kilometres each.
You may be able to claim work-from-home tax deductions without a receipt if you keep a work diary. In fact, if you do work from home, keeping a work diary is a must. The Australian Taxation Office (ATO) now requires individuals to keep a daily record of their work hours, instead of a representative period. Valid records include:
- A diary or similar documentation that you keep on a daily basis.
To claim deductions for expenses such as electricity, gas, and internet, you will need to provide one monthly or quarterly bill. If the bill is not in your name, you will need to provide evidence that you incurred the expense, such as a joint credit card statement or a lease agreement that shows shared expenses. Make sure you also keep receipts for any stationery or computer consumables purchased.
For depreciating assets, keep your records for at least five years after claiming the last depreciating expense. If the receipt for the depreciating asset does not specify the nature of the asset, you will need to provide that information before lodging your tax return. Also, you will need to maintain a four-week representative diary of the work-related use of the asset that shows both your personal and income-generated use of the asset.
Pro tax tip: Do you struggle with record-keeping? Take a look at our comprehensive guide to maintaining impeccable tax records.
What about the $300 rule?
The ATO generally allows individuals to claim some work-related expenses without receipts, but the claim amount is limited to a maximum combined value of $300. To be clear, you can claim work expenses up to $300 without receipts IN TOTAL (not each item), with basic substantiation. This means that if you have no receipts for work-related purchases, you can still claim up to $300 worth on your tax return.
Can I claim small expenses without a receipt?
You don’t have to keep a receipt for work-related expenses that are $10 or less, as long as your total claim for small expenses is $200 or less.
If you don’t get a receipt for small expenses you can still claim a deduction as long as you make a record of them all. One of the easiest ways to do this is to note down small expenses in your work diary. Your record must be in English, and it should show:
- What you purchased;
- The date of purchase;
- Where you got the item from;
- How much you spent.
You can use this to demonstrate how you calculated your deduction if we ask for this information from you.
While the Australian Taxation Office (ATO) does allow for certain deductions without a receipt, it can be challenging to navigate these rules. This is why we always recommend consulting your tax accountant before claiming any deductions without a receipt. If the ATO discovers that you made a claim incorrectly, they may insist that you repay the extra refund and face additional financial penalties.
With a tax agent on your side, you can avoid such costly dramas. ITP’s tax accountants ensure perfect compliance with the rules while seeking out additional deductions to increase your refund. Our tax agents are experts at hunting down every available deduction. So if you’re ready for a healthy tax refund with no stress about audits or financial penalties, contact your nearest ITP branch today.