Tax time is around the corner where the majority of us are required to lodge a return. If you claim deductions, you need to keep good records of your expenses, generally as a receipt or invoice. The ANMJ explored the ATO website to determine the rules for nurses and midwives when maintaining records and the easiest to keep on top of it.
According to the ATO, records can be electronic. This includes taking a photo of your receipt and using an App such as the myDeductions tool in the ATO app to capture information immediately and making it quicker to upload your work-related expenses to your tax return. In addition, if you use a tax agent, they can access your uploaded data through their practice management software or you can email a copy to them from the app.
What do records need to show?
Records must be in English, show what has been purchased when, where and how much you spent. However, the ATO says there are a few exceptions to the rule.
Small expense receipts
Receipt for work-related expenses that are $10 or less are not required, as long as your total claim for small expenses is $200 or less.
But you need to record the expense, such as writing it in your diary so that you can use this to show how you calculated your deduction if the ATO requests this information from you.
Your record must show what you purchased, when, where, how much you spent and it must be in English.
Hard to get receipts
If you can not get a receipt for a work-related expense, you can still claim a deduction as long as you make a record. For example, you can make a record by writing it in your diary.
Your record should show what you purchased, when, where and how much you spent and must be in English. You can use this record to show how you calculated your deduction if the ATO requests this information from you.
Overtime meal expense receipts
You can claim a deduction for your overtime meal expenses (food and drink) without keeping all your receipts if you:
- undertake overtime
- receive an overtime meal allowance paid under an industrial law or award
- spent money on meals (food and drink) you consumed during your overtime meal break
- are not claiming more than the reasonable amount the ATO sets
Even if you aren’t required to get and keep receipts for your overtime meal expenses, the ATO may check your tax return and ask you to show how you calculated your claim. If we ask, you’ll need to provide documents that show:
- when you did overtime
- you purchased a meal
- you correctly declared the overtime meal allowance as income in your tax return.
If you don’t receive an overtime meal allowance paid under an industrial law or an award or are claiming a deduction for more than the reasonable amount, you need to get and keep your receipts for your overtime meal expenses.
You claim what you actually spent, not the reasonable amount.
Travel and meal expense receipts
You can claim a deduction for your accommodation, meal (food and drink) and incidental expenses without keeping all your receipts if your travel is for less than six nights and you:
- receive a travel allowance that’s expected to cover your accommodation, meal and incidental expenses when travelling (a token amount you receive as a travel allowance is not accepted as covering such costs)
- are required to travel for work and sleep away from home overnight
- spent money on accommodation, meals (food and drink) and incidental expenses while travelling away from home overnight for work
- are not claiming more than the reasonable amount set by the ATO
If you travel overseas, you have to keep receipts for your accommodation expenses regardless of whether you meet all of the above points.
Even if you aren’t required to get and keep receipts for your accommodation, meals and incidental expenses when travelling for work, the ATO may check your tax return and ask you to show how you calculated your claim. If they ask, you’ll need to provide documents that show:
- when you were travelling for work (including start and finish times)
- you paid for accommodation, meals and incidental expenses and the cost of those expenses
- you correctly declared the travel allowance as income in your tax return.
The records you need to keep for accommodation, food, drink and incidentals depend on the length of your trip and if it is domestic or international and whether you travel is wholly for work purposes.
If you travel for six or more nights in a row, you may need to keep a travel diary in which you record the dates, places, times and duration of your activities and travel.
If you are required to maintain and keep records, the records you keep may include:
- income statement, payment summary or payslips to show the travel allowances you received
- a travel diary, or documents that show the days you travelled for work, including
- start and finish times
- where you travelled
- when you stopped for meals
- all receipts, invoices or documents for accommodation, meals and incidental expenses showing the
- name of the supplier
- amount you spent
- nature of the good or service
- the date you spent the money
- creation date of the receipt or other written evidence
- Written evidence, such as a bank statement, to show that you were the one who spent the money.
For more information on record keeping, including reasonable travel and overtime expenses head to the ATO website
For more tax tips for nurses and midwives including deductions, click here.