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With June 30 approaching quickly, find out how to get your end of financial year paperwork together for tax time.
The Australian tax system relies on taxpayers self-assessing. This means 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 and you may be required to provide written evidence to substantiate your claim.
Generally, you must keep your written evidence for five years from the date you lodge your tax return, five years after you have claimed a depreciation deduction, and five years after you dispose an asset that involves a capital gain or loss.¹
The records you need to keep depend on your situation, but as a rule, it is better to keep too many records than not enough.
Remember, the coronavirus pandemic has impacted the way many people are working, including working from home. As a result, the ATO has introduced a shortcut for your work expenses and deductions that you can use for the 2020 and 2021 financial years.
The ATO’s myDeductions tool keeps your tax deduction and income records in one place.
The tool enables users to record expenses, photograph receipts and log your work-related travel using GPS data.
It stores all your information in one place and that information can be uploaded into online tax returns at tax time or emailed to your tax agent.
This way of collecting tax records is still effective, although perhaps more time-consuming than end-of-financial-year paperwork needs to be.
Every receipt you collect can be piled into a box to be sorted out when the financial year ends.
If you use a tax agent, you may save time and money by sorting the receipts into categories or creating a list or spreadsheet that tallies them up.
You may still send this information electronically by later photographing all your receipts.
A tax agent is a qualified professional who can help you prepare and lodge your tax return.
You could engage the services of a tax agent either face-to-face or you can do it online.
Registered tax agents are the only people allowed to charge a fee to prepare and lodge your tax return.
However, you are still responsible for the tax records you provide your tax agent.
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*Deciding what is best for you will depend on your personal circumstances and you may want to seek personal financial advice to get the most from your superannuation. You can find out more about financial advice options at qsuper.qld.gov.au/advice
1. Australian Taxation office, Updated 15 June 2020, Keeping your tax records, accessed 15 April 2021, at ato.gov.au
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