Mark Beard - Monday, July 26, 2010
It's tax time again... time to complete those tax returns and collect a refund?
Maintaining financial records
The ATO (Australian Taxation Office) requires both individual employees and businesses to
keep source document evidence of economic activity. The reason being
that expense transactions are used both by individuals and businesses
to reduce taxable income, so naturally the ATO requires available
evidence of the transaction and thus the deduction.
In the case of work-related expenses for individuals the ATO states:
"You must have written evidence to prove your claims if your total claims exceed $300. The records you keep must prove the total amount, not just the amount over $300. The $300 limit does not apply to claims for car, meal allowance, award transport payments allowance and travel allowance expenses. There are special written evidence rules for these claims." Source: www.ato.gov.au
In the case of records for businesses (including companies, sole-traders and partnerships) the ATO states:
"By law, you must keep business records for five years after they are prepared, obtained or the transactions completed, whichever occurs latest. In addition the records must be in English or in a form that we can access and understand in order to work out the amount of tax you are liable to pay."
Are you a special professional?
Did you you know that as a Australian resident (for tax purposes) and a special professional you may be eligible for what the Australia Taxation Office (ATO) calls "Income averaging for special professionals"?
The ATO states:
"You are a special professional if you use intellectual, artistic, musical, physical or other personal skills in the presence of an audience or you perform or appear in a film, on a tape or disc, or in a television or radio broadcast." Source: www.ato.gov.au
Essentially, income averaging is what is called a "concessional tax treatment" and may provide "special professionals" the ability to "spread" their income over a number of years and possibly save on tax.
For more information consult your accountant, tax adviser or downloaded the ATO information sheet via:
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