Historically, the ATO required paper receipts to claim minor business expense deductions. But updated 2023 tax rules now allow alternative digital documentation, like bank statements, in certain cases.
The change means entrepreneurs can substantiate some deductions without keeping piles of printed receipts, streamlining compliance.
Updated ATO Guidelines
The ATO now allows bank statements that clearly displays merchant names, transaction dates and purchase values, to verify certain deduction eligibility without traditional paper invoices. However, the description in statements should clearly indicate the business relevance of purchases.
If additional confirmation is needed, owners can supplement statements with photos of purchase packaging, work diaries outlining tasks undertaken, and duration, if home offices are involved. By maintaining thorough digital records, entrepreneurs can claim real business expenses incurred while complying with updated ATO standards.
Another recent tax rule update introduces a $300 threshold for uncorroborated deduction claims each year. This acknowledges that operating expenses, especially ones that are too small to comprehensively document, can accumulate significantly over 12 months.
By retaining transparent records substantiating income streams, owners can claim up to $300 in deductions annually without every single paper receipt - as long as the amount remains reasonable given earnings. Combining detailed bank data and work diaries now makes reaching the $300 deduction cap easier within updated ATO allowances.
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While reducing paper requirements helps, manually tracking numerous digital transactions still complicates tax time. Entrepreneurs can eliminate this entirely by automating accounting, receipt capture and categorisation with Parpera's all-in-one money management app.
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