If one of your New Year’s resolutions is to get your finances in order, this article is one to have in your toolkit. Keeping receipts and getting more organised will save you time and reduce costs. Most of all, it’ll save you from headaches – and don’t we all want fewer financial headaches?

Each year, the Australian Taxation Office is increasing its efforts to scrutinise unsupported tax deductions. Australians file tens of billions of dollars in tax claims and the biggest percentage comes from work-related expenses. Starting your 2020 on the right financial foot can keep you from facing stiffer penalties of up to 70% of your claim.

Here are some ways to kickstart your 2020 on the right financial foot:

Revisit and Organize Records of Income, Salary, and Allowances

  • Keep your income statement (if your employer reports through Single Touch Payroll or STP), PAYG payment summary or a signed statement from your payer.
  • If you’re earning from interest, funds or rental properties, keep statements from your financial institution or property agent. 
  • If you’re earning from abroad, make sure to keep copies too, preferably in the English language. The same set of evidence applies if you’re receiving pensions or government benefits. 

If one or more sources of income apply to you, make sure to keep and systematise your proofs and statements.

Not only do you need to track your income statements, but you need to neatly organise your income-related expenses. Keep and categorise written evidence of your tax claims and it’ll make your life easier, especially when the ATO asks for proof. Avoiding audits and penalties are good motivation to stay on top of your filing system. Keep your records in paper or digital format. Make sure they are true and clear copies of the original.

To help you stay on top of ATO requirements, we at QC are always happy to assist clients with organising their income and tax-claim records.

Systemise Records of Car and Travel Claims

Keeping car and travel expense records will save you from disallowed claims and audit penalties. 

In 2017-18, more than 2.8 million tax-payers made car-related expense claims amounting to $6.2 Billion. ATO Assistant Commissioner Karen Foat said that 20% of car claims are exactly the maximum limit that doesn’t require receipts. 

Under the cents per kilometer method, taxpayers need not show receipts below 5,000 km but need to demonstrate how they worked out their declared number. “We’ve found many people are unable to show how they’ve arrived at this amount, and as a result, they’ve had their claim reduced or disallowed in full,” Ms. Foat said.

Taxpayers need to keep records of how they arrived at that claim. There are two ways: (1) Cents per kilometer method and (2) Logbook method. Either way, keep receipts and diary entries related to your car expenses such as fuel and oil. Record important data such as odometer readings, registration, insurance, tyres, repairs and interest charges. For travel claims, you need to keep a travel diary, receipts, records of allowances and other costs. Use spreadsheets, clear books and/or folders, whichever wins your preference.

At QC Accountants, we understand how these minute details can consume your time. We are here to help you at any stage. 

Clothing, Laundry and Dry-Cleaning Related to Work

Keep your records of expenses incurred for work-related clothing, sun-protection, protective uniforms and footwear, occupation-specific clothing, laundering and dry-cleaning of the specified clothing above.

Keep a basis for your claim for laundry costs of less than $150, and also keep records for laundry costs above $150. 

Make sure that the clothing is distinctive to your work. Ms. Foat said that if your uniform is not distinctive for work, you can’t claim for it. If the company reimburses or spends for you, you can’t file a double claim.

“We saw an example where a doctor was claiming $150 for the cost of washing his scrubs, but the hospital was washing the scrubs. So that was disallowed,” she said.

To save your time and effort, make sure to keep records. Your work-related clothing expenses and receipts need to be organised for you to stay on top of your claims.


Want to save time and energy? Consider getting help from tax specialists, in becoming organised. Contact us at QC Accountants for a free consultation. We’ll assist you in avoiding over-claims or declaring unsubstantiated tax-claims, so you can be rest assured of receiving the full benefit of your entitlement.