The key to staying out of trouble with the ATO is to keep records.

Even if you’ve played everything by the book, if you don’t have documentation to support your position if the ATO asks you questions, you could find yourself stuck with an additional tax bill, plus penalties and interest. So, what records should you keep?

INCOME AND SALES RECORDS

Details of all the jobs you have done through Airtasker breaking down gross income less Airtasker fee.

EXPENSE OR PURCHASE RECORDS

It's important to keep records of all your business expenses such as materials, motor vehicle costs (fuel, servicing and repairs), work specific clothing, etc including cash purchases. Records could include receipts, invoices, credit card vouchers and diaries to record small cash expenses. 

If you purchased something which is partly used for private use and partly for business use, you’ll needto keep a record showing how you worked out any private use for that item.

For example, if you purchase a mobile phone which costs $500 (exclusive of GST) and is used 90% in the business and 10% privately, you can only claim a tax deduction on $450 (being 90% of the costs).

Download our mobile app to track all your expenses.

YEAR-END RECORDS

These include lists of people that you owe money to (creditors) and lists of people who owe you money (debtors).

You’ll also need worksheets to calculate the decreasing value of your assets (of which your car might be the main one). These are called ‘depreciating assets’. This calculation can be complex and you might be best to get your accountant to prepare this for you.

BANK RECORDS

Documents you receive from the bank such as bank and credit card statements and loan documents.

GOODS AND SERVICES TAX (GST) RECORDS

The main GST records you need to keep are tax invoices from your suppliers. You need a tax invoice to claim GST credits. Allow time each week to keep your records up-to-date. This helps when it’s time to do your tax as all the information is already there and you’re not overwhelmed with paperwork. This frees up time to focus on making money, instead of doing paperwork.

You must keep your records for at least five years, either in paper form or electronically. As paper invoices and receipts tend to fade, we recommend electronic copies.

For more information, find your local H&R Block office and make an appointment.

 

Updated: February 2017

Get your weekends back with H&R Block bookkeeping

With expert set up and support, we’ll take the time and hassle out of managing your books. Which leaves you the time to get on with your business. Book your free business review.

Free business review

Get your weekends back with H&R Block bookkeeping

With expert set up and support, we’ll take the time and hassle out of managing your books. Which leaves you the time to get on with your business. Book your free business review.

Free business review