2010 Checklist — Individual Tax Returns
Income
 Gross salary, wages, allowances, benefits, earnings, tips and director’s fees
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Income from business activities
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PAYG payment summary amounts
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Any non-cash benefits received
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Lump sum and termination payments [All documentation should be provided, including an ETP payment
summary from the employer or Superannuation Fund]
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Government social security payments, including pensions, unemployment and sickness benefits
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Capital Gains from CGT asset sales (e.g. shares and real estate) [Information relating to dates of, and costs
associated with, acquisition and disposal will be required to determine the capital gain (if any). Remember that
individuals, companies, trusts and superannuation funds can save tax if they qualify for the various CGT
concessions]
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Annuities, including allocated pensions
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Income from trusts and partnerships [Statements of distribution should be provided]
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Rental income
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Interest and dividends (franked or unfranked) including any tax deducted [Dividend distribution statement will
be required to confirm the dividend received]
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Foreign source (employment and pension) income [Details of any foreign tax paid will be required]
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Personal services income [Individual contractors who operate through a company or trust can potentially be
taxed personally on the income instead of income being taxed at the company or trust level]
Deductions
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Investment and property expenses [Carefully detail interest claims]
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Professional subscriptions (not including sporting or social clubs)
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Expenditure records related to a taxpayer’s employment, such as work-related motor vehicles, self-education,
protective clothing and uniform expenses
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Donations of $2 and over, depending on the recipient
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Superannuation contributions made by self-employed persons and those without employer superannuation
support
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Tax agent’s fees and other accounting and tax audit fees associated with managing tax affairs
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Special deductions (e.g. Australian films, investment shelters and forestry-type schemes)
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Bank fees (where the credit or deposit represents assessable income)
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Un-recouped prior year losses
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Non-commercial losses [Individuals must satisfy one of four tests to offset losses from certain non-commercial
business activities against other income. A prime example is an employee who seeks to offset hobby-type
farming or other business losses against salary or investment income]
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Sickness and accident insurance premiums, provided the premium incurred is against the loss of income
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Small Business & general tax break on new depreciable assets acquired between 13/12/08 – 30/06/09
Rebates
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Details of private health insurance, unless the premium is net of the rebate [Statement from health insurance
provider will be required to determine entitlement to rebate]
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Any changes in dependants [Income of spouse will be required]
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Details of any income received in a lump sum which was accrued in earlier income years (e.g. assessable
pensions)
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Details of medical expenses where the total exceeds $1,500 [Tax offset of 20% available]
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Superannuation co-contributions made by eligible employees and eligible self employed who have not claimed
a Tax deduction for the contribution.
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Education Tax Refund on eligible education expenses for a child in primary & secondary school
Note: Low income taxpayers with a dependent child (under 21) or qualifying dependent student should check to
see if they are eligible for Family Tax Assistance.
RULES FOR CLAIMING WORK RELATED EXPENSES
These rules, based on information published by the ATO, shows the principal types of tax records that
may commonly need to be kept by individual taxpayers
Rules for claiming work related expenses
A deduction is allowable if you can show that an expense was:

actually incurred
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meets the deductibility tests, and
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satisfies the substantiation rules.
ACTUALLY INCURRED
You must have incurred the expense in the relevant year of income (for example, to claim a deduction in
your 2010 income tax return, you must have incurred the expense between 1 July 2009 and 30 June
2010).
DEDUCTIBILITY TEST
You must, in the first instance, be able to show that work related expenses were incurred in the course of
gaining or producing assessable income, and not losses or outgoings that are of a capital, private or
domestic nature.
For an expense to be allowable as a deduction, you must be able to show:

the essential character of the expense is income-producing
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there is a nexus between the outgoing and the assessable income in that the nature of the outgoing
is incidental and relevant to the gaining of assessable income, and
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there is a necessary connection between the particular outgoing and the operations or activities by
which you most directly gains or produces assessable income.
SUBSTANTIATION GENERALLY
The key principle underlying substantiation is that to deduct work expenses you needs to substantiate
them by obtaining written evidence of the expense .
Expenses $10 or less
· The requirement to obtain a document from the supplier does not apply if the expense is $10 or less
and the total of all such expenses is $200 or less. In such cases, you are required instead make a record
of the expense.
· Your record of the expense (eg in a diary or on a travel itinerary) will also be sufficient if it would be
unreasonable to insist on the supplier's document. Such expense may be more than $10 and does not
count towards the $200 limit. Examples of expenses for which your record is acceptable are: toll bridge
fees, parking meter fees, cash payments to informants and entrance fees to shows where entry tickets
must be handed in on entry .
Total work expenses less then $300
· The substantiation requirements do not apply where an employee's claims for work expenses (including
laundry expenses) total $300 or less. If the total amount of the claims exceeds $300 the total amount
must be substantiated. Expenses relating to allowances covered by special rules (ie overtime meal
allowances, travel allowances and award transport payments: see below) and car expenses are not
taken into account in determining whether this limit has been reached.
· Even if the work expenses claimed exceed $300, the taxpayer can deduct up to $150 of
unsubstantiated laundry expenses. Laundry expenses include the cost of washing, drying or ironing
clothing, but not dry-cleaning.
· Annual payment summaries can be used as evidence of certain expenses, including where expenses
of the same nature are shown on the summary as a total (e.g. the total amount of union fees paid during
the year).
· The written evidence must be retained and be made available to the ATO on request. It is not required
to be lodged with annual tax returns.
· Records need to be kept for a period of five years from the date of lodgement of the return in which the
claims are made. This period is extended if, at the end of the five years, the taxpayer is involved in a tax
dispute with the Commissioner.
-Even where the substantiation requirements do not apply (as in the case of certain overtime meal
expenses , you must still be able to show that the expense was incurred for deductible purposes and that
the basis for determining the amount of the claim is reasonable
Car and travel expenses
If you incurred work related car expenses and wants to claim these as a deduction, the nexus has to be
established. If you are selected for a review or an audit, you may be asked to provide the following
records:
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details of you employment duties including information about:
o
the requirement to travel to alternate work places, and
o
the need to transport any bulky equipment to and from the workplace for work purposes
letter(s) from your employer(s) with a contact name and telephone number to confirm the details
contained therein:
o
why you are required to use their car in the course of carrying out their employment
duties, and
o
details of any reportable fringe benefits, allowances or reimbursement to compensate you
for expenses incurred
ownership, leasehold or hire purchase of the motor vehicles for which you have claimed a
deduction.
There are several methods under which you can claim car travel expenses –
Cents per kilometre method
· Records showing calculation of business kilometres travelled and the amount of the claim, e.g. diary
entries and documents to show the engine capacity of the car.
Logbook method
· Odometer readings for the start and end of the period being claimed.
· Business usage percentage based on the log book.
· Receipts for fuel and oil expenses or a reasonable estimate based on odometer readings.
· Receipts or other documents showing other expenses related to the car, eg registration, insurance,
lease payments, services, tyres, repairs, interest charges.
For the first year in which the logbook is used, the logbook must cover at least 12 continuous weeks and
show:
· when the logbook period begins and ends
· the car's odometer readings at the start and end of the logbook period
· the total kilometres travelled in the log book period
· the kilometres travelled for work activities based on journeys recorded in the logbook. In recording the
journeys you need the start and finishing times of the journey, the odometer readings at the start and
end of the journey; kilometres travelled and the reason for the journey
· the business use percentage for the log book period.
12% of original value method
Either:
· sale or purchase, lease or hire purchase agreement, or
· records of how you calculate business kilometres travelled.
1 /3 of actual expenses method
· Odometer readings for the start and end of the period being claimed.
· The basis on which the business kilometres were calculated.
· Details of the make, model, engine capacity and registration of the vehicle.
· Receipts for fuel and oil expenses or a reasonable estimate based on odometer readings.
· Receipts or other documents showing other expenses related to the car, eg registration, insurance,
lease payments, services, tyres, repairs.
Travel expenses
If you incurred travel expenses for using a vehicle other than a car (for example, utility trucks or panel
vans with a carrying capacity of one tonne or more, vehicles with a carrying capacity of nine or more
passengers, and motor cycles) and wants to claim a deduction, the nexus has to be established. If you are
selected for a review or an audit, you may be asked to provide the following records :
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
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details of employment duties, including information about:
o
the requirement to travel to alternate work places, and
o
any bulky equipment transported to and from the workplace for work purposes
letter from your employer including contact name and telephone number to confirm:
o
why your client was required to use their vehicle in the course of carrying out their
employment duties, and
o
details of any reportable fringe benefits, allowances or reimbursement to compensate your
client for expenses incurred
if capital costs are being claimed, ownership, leasehold or hire purchase of the motor vehicles for
which your client has claimed a deduction
These records may include:
· a travel diary showing the dates, places, times and duration of your activities and travel
· written evidence of your travel expenses, e.g. receipts, invoices and travel allowance details
· in relation to award transport payments . If you claim up to the value of the award that was in force on
29 October 1986, no written evidence is required. If you choose to claim more than this amount, written
evidence is required for the whole of the amount claimed
· receipts for actual costs incurred for using a car owned or leased by someone else, eg petrol and oil
· receipts or other documents showing the amount and date of the expenditure in relation to vehicles
other than cars, e.g. motor cycles, utilities or panel vans with a carrying capacity of one tonne or more, or
any other vehicle with a carrying capacity of nine or more passengers
· receipts or other documents (diary entries) for air, bus, train, tram and taxi fares, bridge and road tolls,
parking and car hire fees.
The documentation required for travel depends on the length of stay and whether a travel allowance has
been received. Where a travel allowance is received, and you restrict your claim to the Commissioner's
reasonable amount, you do not need to keep written evidence of the expenses incurred
Clothing, uniforms, sun protection
If you incurred work related clothing and laundry expenses and wants to claim these as a deduction, the
nexus has to be established. If you are selected for a review or an audit, you may be asked to provide the
following records :
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details of your requirement to wear compulsory and non-compulsory uniform, or occupation
specific clothing as part of the conditions of their employment
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details or duty statement of your requirement to wear protective clothing as part of their
employment
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information about how and why the clothing or uniform you wear qualifies as uniform, protective
or occupation specific
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letter from your employer including contact name and telephone number to confirm:
o
the requirement for you to wear compulsory or non-compulsory uniform, protective or
occupation specific clothing
o
details of the specific apparel worn and why the clothing or uniform you wear qualifies as
uniform, protective or occupation specific clothing
o
details about whether work-related uniform, or protective or occupation specific clothing
was supplied by the employer, or whether you were reimbursed to compensate for
expenses incurred, and
o
details of any specific uniform and laundry allowances paid to you.
These records may include:
· Receipts for uniforms, occupation-specific and protective clothing.
· Basis for claim for laundry costs if less than $150; diary entries or receipts for claims greater than $150.
· Receipts for dry cleaning costs.
· Receipts for sun protection items
Self-education
If you incurred work related self education expenses and wants to claim these as a deduction, the nexus
has to be established. If you are selected for a review or an audit, you may be asked to provide the
following records :
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
explanation of and/or details about the following:
o
your employment duties at the time the course was being undertaken, and
o
the aims and/or specific purpose of the course and how it was directly relevant to your
current duties; or likely to lead to an increase in their salary, wages and allowances
letter from your employer(s) including contact name and telephone number to confirm:
o
that you were required (or actively supported by the employer) to undertake a course as
part of carrying out their employment duties
o
that the course undertaken was directly relevant to your current duties at that time or likely
to lead to an increase in their income from their current salary, wages and allowances, and
o
details of any reportable fringe benefits, allowances or reimbursement to compensate you
for expenses incurred.
These records may include:
· Receipts for expenses such as course fees, textbooks, stationery, decline in value of (and repairs to)
depreciating assets
· Receipts, documents or diary entries relating to travel expenses
Other work-related expenses
· Receipts, other documents or diary entries recording expenses, eg diary maintained over
representative period to support apportionment of computer, home office expenses(unless 26 cents p/hr
used)
· Receipts for expenses related to decline in value of depreciating assets.
· PAYG payment summaries showing union dues, overtime meal allowances, etc .
Gifts
To claim a concessional deduction for gifts:
· receipts for donations or contributions
· where donations made through your pay, PAYG payment summary or signed letter from donee
organisation.
Medical expenses
To claim the medical expenses tax offset:
· receipts or other documents showing medical expenses paid
· documents confirming relevant payments made to residential aged care facilities
· statement from Medicare or private health fund re reimbursements.
Rental Property Expenses
· Documents such as bank statements showing interest charged on money borrowed on rental property.
· Receipts or other documents showing other property expenses, eg advertising, bank charges, council
rates, gardening, property agent fees, repairs, maintenance.
· Documents showing details of expenses related to decline in value of depreciating assets or any capital
work expenses, eg structural improvements .
Acquisitions and disposals
For CGT purposes :
· Documents showing dates of acquisition of asset and the date the CGT event occurred, eg contract for
purchase or sale, dividend reinvestment statement.
· Document showing amount and date of expenditure in relation to asset, eg council rate notices for
vacant block of land .
· Records of net capital losses from previous years.