I often get asked by clients how long they should keep their tax records. It could include bank statements, sales receipts or even accounts payable records. The answer is that every Australian taxpayer carrying on a business must keep records explaining all business transactions and any other matters which may affect their tax liability.
With self-assessment, and particularly for companies paying tax with their return, it is essential that sufficient records are available to verify the tax due. The general rule is to keep records for at least 5 years. If you are not carrying on a business and you are on wages or pension only, the retention period can be reduced to 2 years or less.
This would usually be stated on your notice of assessment issued by the tax office.
One word of caution! Do not be in too much of a hurry to destroy records. I came across a suspected fraud case a while back where the suspect was accused of destroying evidence just by clearing out old papers etc.
But, in general, anything that’s over 5 years, can be gotten rid of.
About The Author
Warren Kruger is an Australian Tax Specialist and Advisor. For a FREE Report "7 Essential Strategies to Reduce Your Taxation NOW!" Sign Up RIGHT NOW in the above right Opt In Box