How many times have you said no to a receipt, and then realised later you actually needed one? Poor or inconsistent record keeping is common when it comes to tax preparation, but can be avoided by creating a few good habits.
But why bother? Well, keeping records is actually one of the most important ways to ensure you are prepared for tax time. It can save you time, and it could even get you a bigger refund. Not only this, it will also help you out if you’re ever audited by the ATO.
While some purchases may not need a receipt to be included as a deduction, it’s always safest to have as much evidence of your expenses as possible.
Here are the top three record keeping tips that will help you prepare for tax time and minimise stress.
1. Get into the habit of saying ‘yes’ to receipts
So many of us tune out when asked that question, and immediately respond with ‘no thanks’. A good way to avoid missing important receipts is to always say yes or request receipts when making purchases. Not only could this help your personal spending if you needed to return something, but it’ll help ensure you have all relevant expense records when tax time comes around.
2. Make notes and categorise as soon as you purchase
Each receipt you collect for tax purposes, write a small note either on the back of the receipt or in a notebook that provides more detail about what that purchase was for. This can save you the hassle of trying to remember what that purchase was 11 months later! Also consider allocating each receipt to a category of spending, for example rent, insurance, meals/entertainment, education, gifts etc.
3. Take your record keeping digital with the ITP Tax App
If you have one of those accordion folders at home full of old paperwork, or reams of bills and receipts piling up in odd places, then you’re likely familiar with the challenges that come with hard copy record keeping. The good news is, we’re living in the digital age which means there’s really no need for piles of paper anymore! In fact, start replacing your paper records by downloading and using the ITP Tax App to make your record keeping easier than it’s ever been by taking photos of your receipts and uploading them, and then storing and organising your receipts for easy searchability and durability.