For most tax deductions claimed with the Australian Tax Office (ATO), you’ll need to hang on to your receipts as evidence of your expenses. However, there are still several items you can claim without the need for a paper trail.
The ATO did not make any major updates to claims without receipts in 2017. So, it’s good news for individuals who need to enter a similar range of expenses to those that they had last year. Knowing what you can put down in your tax return without a proof of purchase is crucial to getting the best tax return possible.
Here’s a quick run down of what you can claim on tax without receipts in 2017.
The Receipt-Free Limit
Firstly, it’s important to understand the ATO’s threshold for work-related expenses without a receipt. You are required to provide written evidence to claim a tax deduction if your total expense claims exceed $300. If your total expense claims total less than $300 the provision of receipts is not required at all. There are however a range of claims for eligible work related expenses that can be made without the need for receipts.
Uniforms and Clothes – $150 Laundry
You can make a number of claims on tax for laundry and washing eligible work clothing – as long as they’re work related. There are tax deductions available for washing uniforms or clothing with a brand or logo, protective and high visibility clothing and a range of other eligible items. Check out our guide on claiming uniform expenses to see what all of the rules are on this.
To avoid needing to show a receipt, just make sure the total expenses you’re claiming comes to $150 or under. Anything over the $150 threshold will require you to save all those crumpled dry cleaning receipts and keep tabs during on your washing costs throughout the year.
Home Office and Travel
For most Australians, work and travel expenses will make up the bulk of tax deduction claims, most of which require written evidence due to the large amounts involved. Thankfully though, there’s still several deductions you can make at tax time which won’t require it.
If you spend time throughout the year working from home (even if it’s only here and there) you can make a range of claims. One you can make without a receipt, however, is an ATO general allowance of $0.45 per hour. This covers requirements like power, heating and cooling, and depreciation of an office desk and chair. For everything else – internet, stationary and technical devices – you’ll need to claim them individually and ensure you have the proof of purchases to back it up.
Travel expenses that come under a travel allowance and aren’t beyond the reasonable travel amounts as set out by the ATO. This is especially applicable to long distant truck drivers who spend many nights away from home and operate under a union award.
Utilising the km based method to claim motor vehicle expenses related to when you have been required to use your private motor vehicle for work related activities does not require you to retain receipts. Instead a diary of the work related of trips and estimated km’s travelled during a year is all that is required.
Meals at Work
While we’d all love the ability to write off all those delicious lunches with friends at the expensive place near your office, the ATO doesn’t quite allowed that.
If your role includes overtime meal allowances though, you’re in luck. Provided it’s within the reasonable amount set by the ATO, you can claim these without needing a receipt. Just make sure you check your industry award and work entitlements to see what you’re eligible for.
Collecting paper receipts is not the most optimal system, and the ATO understands that sometimes things can happen and receipts can be lost or destroyed.
For this reason, if you can show the ATO that you’ve done everything possible to stop this occurring, they have the ability to waive the receipts requirement. Similarly, if you reasonably did not assume that a receipt was needed for a purchase or if there’s enough evidence to show you are entitled to a deduction without one, the ATO can take this into consideration also.
It can be a hassle asking for receipts everywhere you go, and people often put off doing their tax to avoid rounding up the tiny papers littered throughout their cars, wallets and office drawers. But if you’re organised, doing your tax can be easy and quick. By understanding what you can claim as well as what you don’t need receipts for, you’ll make the process much easier both during the year and at the end of it. And for those claims that do require proof, there are now many apps you can download for smartphones and computers to help keep track.
Exceptions for Claiming a Tax Deduction Without a Receipt
There are special circumstances in which you can claim a tax deduction without a receipt when you would normally need one. Any exemption provided under these circumstances is at the discretion of the Commissioner who will decide if the evidence you have supplied is enough to make a claim. This evidence must amount to more than just a written or spoken declaration that you are entitled to a tax deduction.
The circumstances where you can make claims for unsubstantiated tax deductions are:
- Where there is sufficient evidence to prove you’re entitled to a tax deduction despite the lack of acceptable written evidence.
- Where there was a reasonable expectation that written evidence would not be necessary.
- Where the written evidence has been lost or destroyed and you have taken reasonable steps to prevent this from occurring.
The expenses that can be claimed under these special circumstances are:
- Work expenses
- Car expenses that come under the ‘one third of actual expenses method’, or the logbook method. Deductions calculated under the cents per kilometer method or 12% of original value method are not applicable
- Business travel expenses
- Only applies to expenses incurred by individuals, or partnerships that include one individual
Not understanding the laws regarding written evidence is not an acceptable reason to not provide a receipt if required.
If your written evidence has been lost or destroyed, you can only claim a tax deduction if:
- You have a complete copy of the original acceptable document, or there is reasonable evidence to suggest that creating a copy was not possible.
- The destruction or loss was not a result of carelessness.
While there are special circumstances in which you can receive a tax deduction without necessary evidence it’s important to remember that any exemption you receive is entirely at the discretion of the Commissioner. It is a lot easier to keep a receipt than to go through the process of proving your entitlement to the ATO.
If you still have questions about what you can claim on tax without receipts in 2017 or want to know more about claims, contact your friendly professionals at Online Tax Australia.