Tax Basics

Keeping your tax records

What is this advice about?
The Australian tax system relies on taxpayers self-assessing. This means that you are responsible for working out how much you can declare and claim on your tax return. You also need to be able to show how you arrived at these figures; in some cases you may be required to provide written evidence.

In order to prepare an accurate tax return and support the claims you make, you need to keep careful records - which records depends on your personal circumstances. If you are not sure, it is better to keep too many records than not enough.

This guide will provide general advice to help you identify what records you need to keep.

Why should you keep records?
To provide written evidence of your income and expenses.
To help you or your tax agent prepare your tax return.
To ensure that you are able to claim all your entitlements.
In case the Tax Office asks you to prove the information you provided in your tax return.
How long should you keep your records?
You must keep your written evidence for 5 years from the date you lodge your return, or:

if you have claimed a deduction for decline in value (formerly known as depreciation), 5 years from the date of your last claim for decline in value
if you acquire or dispose of an asset, 5 years after it is certain that no CGT event can happen for which those records will be needed to work out a capital gain or loss, and
if you are in dispute with the Tax Office, the later of 5 years from the date you lodge your return or when the dispute is finalised.
What records should you keep?
You should keep records in these main categories:

any payments you have received
any expenses related to payments received
when you have acquired or disposed of an asset – such as shares or a rental property
any tax deductible gifts or donations, and
any medical expenses.
This Advice tells you what main types of records you should keep in each of those categories. You may also need to keep records in some other categories, or for other members of your family, for instance if you receive the Family Tax Benefit.

Also, in some cases you may need to estimate items, such as how far you will travel during a financial year. At the end of the year, if you travel more than you estimated, you may need to have kept more records.

So if you’re not sure whether or not to keep a record, then do – you can decide again at tax return time, and you’re better safe than sorry!

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Last Modified: Wednesday, 14 May 2003

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