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Tax Deductions & Substantiation
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By Ershad Ullah On July 19, 2023

Tax Deductions & Substantiation: Let’s be honest, none of us want to pay any more taxes than what’s required of us. We all work hard and it’s important that we legally minimize taxes that we must pay.

As a taxpayer, you essentially should be working towards three main objectives:

  1. Help you get the maximum total of tax deductions available to you, and
  2. Helping you organize your taxation affairs with ease, and
  3. Allowing you to minimize the risk of problems in the event of an audit or review by the ATO.

How to Organise Your Receipts

While there is no right or wrong way to gather or store your receipts, many of our clients use some very easy methods. For example, buy a refillable display book for about $5 from Officeworks and store all your receipts in it.

This system is cheap, simple, and easy. You could also use an alternative such as paper envelopes or manila folders.

Technology, such as mobiles, can also be used to help store documents and receipts. Most phones have a camera that can be used to photograph all receipts which can then be allocated to a tax folder. There are many apps and products that can also be used.

Nature of Documentary Evidence

The ATO imposes a few musts in relation to all our receipts and documents: They must:

  • be in English, and
  • have the date on which the expense was incurred, and
  • name the person or business who supplied the goods and services, and
  • show the amount of the expense in the currency in which the expense was incurred; and
  • give details of the nature of the goods or services

Investax Group Tip
Although many people don’t use cheques anymore, a cheque butt alone is not regarded as suitable
documentary evidence.

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