You may be wondering: Can I claim deductions without receipts in Australia? This question may strike your mind when you fail to keep receipts. Well, this is a common concern, but it doesn’t mean that you have to skip those deductions. The good news is that the Australian Taxation Office allows limited claims without receipts, but there are some restrictions. In this blog, we’ll discuss what’s allowed so you can file your tax return with confidence.
What are the ATO Requirements for Deductions?
Before we discuss exceptions, we should understand that the ATO’s general rule is that you must have proof of money you spent and expenses that were related to earning your income. In simple words, according to ATO’s guidelines, you need to have solid evidence, such as:
- Receipts
- Tax invoices
- Bank or credit card statements
This rule applies to all your work-related deductions. Claiming tax deductions without receipts is the exception, not the rule. Keep in mind that every single deduction must be a legitimate cost of doing your job, not a personal expense. It might be easy to get confused when understanding ATO’s guidelines for tax deductions, so you can hire a tax accountant near your office by searching online for the ‘best tax accountant near me’.
ATO Limits on Claiming Deductions Without Receipts
Some limits have been set by the ATO for certain claims to streamline the process. Remember one thing: exceptions don’t allow you to claim an automatic deduction.
Total work-related expenses $300 or less
Total claim for work-related expenses of $300 or less will allow you to claim a deduction without receipts, as long as you can show:
- You spent the money
- How did you calculate the amount of your claim?
However, this deduction limit for work-related expenses doesn’t apply to claims for:
- meal allowances
- car expenses
- award transport payments allowance
- travel allowance expenses
These can be claimed separately, and you must follow different record-keeping rules. You must have written evidence to support a claim if the total claim for work-related expenses is more than $300.
Total laundry expenses $150 or less
If your total claim for work-related laundry expenses is $150 or less (except dry-cleaning expenses), you can claim a deduction without a receipt. However, you must keep a record that shows you spent the money on laundering work-related clothing and how you calculate the amount of your laundry claim. As long as your claim doesn’t surpass $150, it can be worked out by:
- $1 per load (if you wash only work clothes in that load)
- 50 cents per load (if you mix other clothes in with your work clothes).
In case the total claim for laundry expenses exceeds $150, you need to keep a receipt to support all of your claims. You can also ask bookkeepers in Melbourne to keep a record or receipt of every expense.
Small expenses receipts
Small expenses you incur that are $10 or less. If you don’t get a receipt from a supplier, you may still be able to claim a deduction for small expenses if you have a record in the form of a diary note or a note in your phone. Your total claim for small expenses for an income year must be $200 or less if you have an accurate record. After incurring the expense, you must keep a record and provide details of the:
- name or business name of the supplier
- cost of the asset or amount of the expense
- nature of the goods or services you purchase
- date when you buy the goods or services
- date when the record was made.
Hard to get receipts
If you incur expenses where it is difficult to get a receipt, you can keep a record in a diary or on your phone instead of getting a document from the supplier. Hard to get receipts, expenses are excluded from $200 limit for small expenses. You might not be familiar with these rules and regulations, so you can hire the best accountant Melbourne to help you understand.
Conclusion
It’s essential to know when you need to keep receipts and when you can claim deductions without keeping receipts. If you don’t understand ATO’s rules, you can get help from Reliable Melbourne Accountants to claim potential deductions to save you money.