Tax Deductions without Receipts

Tax Deductions without Receipts

Understanding when you need a receipt to claim a tax deduction is important in getting the best possible tax return. Throwing away receipts or not recording expenses appropriately can cost you a lot of money. For the most part, you must have written evidence to claim a tax deduction based on expenses incurred. But, there are a few exceptions.

When Do You Need a Receipt to Claim a Tax Deduction? 

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 also strict rules as to what constitutes written evidence; the ATO will only accept the following:

  • Documentation written in English if the expense was incurred inside Australia.
  • A receipt from supplier of the goods or services, receipt must document the following:
  1. Name of the supplier
  2. Amount of the expense
  3. What the goods or services are
  4. Date expense was incurred
  5. Date of the document

In place of a receipt, the following documents are also acceptable, as long as they contain the above information:

  • Bank statements
  • Credit card statements
  • BPAY reference numbers
  • Email receipts
  • PAYG payment summary
  • Paper or electronic copies of original documents

Evidence recorded by you without a receipt is only acceptable for:

  • Small business expenses of $10 or less, as long as the total of these expenses does not exceed $200
  • If you were unable to acquire written documentation, e.g. parking tickets where you cannot keep the original ticket
  • Again, the summary of expenses must contain all the information listed above.

When Can You Claim a Tax Deduction Without a Receipt?

When claiming expenses where receipts are not required you may be asked to explain why the claim is reasonable based on your occupation.

You can claim a tax deduction without a receipt in the following circumstances:

  • Laundry expenses to maintain eligible protective clothing or uniforms up to and amount of $150
  • Travel expenses that come under a travel allowance and aren’t beyond the reasonable travel amounts as set out by the ATO
  • Award transport payments, as long as the amount is within the amount payable and under an industry award
  • Home office deduction of $0.34 per hour should you be required to undertake any of your work activities at home.

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:

  1. Where there is sufficient evidence to prove you’re entitled to a tax deduction despite the lack of acceptable written evidence
  2. Where there was a reasonable expectation that written evidence would not be necessary
  3. 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:

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.

Or better yet, get in contact with Online Tax Australia and we’ll give you all the information you need to get the most out of your return.

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