Tax receipts: A simple guide for business owners
What types of tax receipts should you keep?
When you own a small business, you want to get every possible deduction on your taxes. Without tax receipts, the maximum amount you can claim is $300. That’s why it’s important to keep a tax receipt for every expense, such as:
If you travel for work and are away from home overnight, you may be able to claim your travel expenses. You may also be able to claim costs associated with your employees’ travel, if you reimburse them. Keep all travel-related receipts for accommodations, meals, airfare and other types of transportation.
Work-related vehicle expenses, such as petrol and maintenance, may be deductible in some cases. You’ll need detailed records, including odometer readings, to show the Australian Tax Office (ATO) when you used your personal vehicle for business purposes.
Clothing and footwear
You may be able to deduct the cost of items that you wear to protect yourself on the job — steel-toe boots, scrubs or hi-vis vests, for example.
The ATO defines an instant asset as the “business portion of the cost” of an asset in its first year of use, or in the first year it’s installed and ready to use. Businesses can claim this deduction for multiple assets that meet the ATO’s criteria and cost threshold.
What are the ATO tax receipt requirements?
If you intend to claim business expenses as deductions, your sales receipts must include:
vendor/supplier name and their Australian business number or company number
cost of the purchase
a description of the product or service
the date you paid the expense
the date the vendor/supplier issued the receipt.
If you misplace a receipt of purchase, you might still be able to claim a deduction if your bank statement shows the date you paid for goods or services, the amount you paid and who the recipient was.
When do you need to provide tax receipts?
If you sell products or services, you must give customers a payment receipt for any purchase exceeding $75. Customers may also request a receipt for purchases under $75, but you then have 7 days to provide one.
How long to keep business records in Australia
Keep any personal (non-business) receipts for 5 years from the date you claimed corresponding expenses on your tax return. The Australian Securities & Investments Commission requires business filers to keep tax receipts for 7 years from the lodgement date.
How to store receipts
If you have digital copies of your receipts — photos or PDFs, for example — you can upload them to the cloud. The benefit of storing your receipts in the cloud is that you can access them from any device that’s connected to the internet.
ATO myDeductions tool
The ATO offers a free tool called myDeductions that you can use to store tax receipts. With the mobile app, you can capture a photo of a receipt, categorise it and store it to your device. Then, when it’s time to lodge your taxes, you can upload your receipts or email them to the ATO.
Accounting software combines the convenience of a mobile app with the security of cloud-based storage. Upload your receipts to the software platform, then transmit them directly to the ATO when you lodge your taxes.
Accurate record keeping with MYOB
Tax time needn’t be taxing. With MYOB’s cloud-based accounting software, it’s easy to capture expenses on the go. This means you have an accurate view of your business cashflow while also having all your records safely stored and backed up in the cloud. At tax time you can invite your accountant or bookkeeper to your software, so you can be sure you claim everything you’re entitled to. Try MYOB FREE for 30 days today.