How long do I need to keep tax records?
Keep records for 5 years from the date you filed your original return or 5 years from the date you have claimed a deduction for decline in value (depreciation). Keep records for 5 years from the date you reported a capital gain and keep records for 5 years from the date you used and offset a capital loss.
What info do I need to keep?
You must keep all your business records for five years, including tax invoices, receipts, salary and wages records, tax returns and activity statements, and super contributions for your employees.
Do I need to keep it “paper copy”?
You must keep an electronic or paper copy of all records. As a general rule, the ATO requires you to keep records for 5 years from the date you lodge your tax return.
If I keep it electronically what precautions do I need to take?
The ATO recommends that you keep your computer system secure and accurate. It is vital to have good back up procedures for computer files and programs with external off site storage. This ensures records can be recovered if something unexpected happens. You must also show that you have control over access to your computer through passwords, incoming and outgoing information and processing of information.
You should insure:
- Records can not be manipulated or altered
- If you change your system you still need to be able to access the original data (BEWARE when you use cloud accounting you lose access when you cease paying the subscription so ensure you have adequate backups.
I scan my documents into Xero, is that okay?
For the current year yes but consider how you will produce those documents in 5 years’ time, in particular if you have ceased your subscription with Xero. We recommend keeping a backup copy of documents on an external hard-drive.
I have them all saved to my computer, is that okay?
Yes but what happens if your computer fails? We recommend backing up the info to a secure cloud account or an external hard drive.
What do I do if I have lost receipts or documents?
If you’ve lost the original receipt, then as long as you have some record of payment from say, a credit card, you should be OK. … Even with a larger expense, like a computer purchase, if you can show a corresponding payment on a bank statement or credit card bill, you should be in the clear.
However you should make every effort to try to obtain a duplicate copy of the receipt. As long as you can show you have made the effort to obtain a duplicate the ATO will look more favourably on you.