Every business must have accurate records of everything, whether it’s a small financial transaction or any kind of receipt of a business expense. Records provide evidence of the earned income or the expenses you have incurred. In today’s blog, we’ll discuss what types of records you need to keep for your travel expenses.
What Records Do You Need for Travel Expenses?
Unless an exception applies, you need to keep complete records to support your claims for travel expenses. This may include:
- written evidence of your expenses, such as receipts
- travel diary or record of your travel activities.
You must keep your travel expense records for at least 5 years from the day you file your tax return. If you fail to keep written records of your travel expenses, you won’t be able to claim your travel expenses as a deduction. You may qualify for the record-keeping exception if you receive a travel allowance from your employer. For record-keeping of your travel expenses, you can choose to hire bookkeepers in Melbourne.
Written Evidence of Your Expenses
Written evidence is a receipt or other document of your expenses. Written evidence can be in the form of paper, digital or electronic that you receive from the supplier of the goods or services. It must have the following information:
- name of the supplier
- amount of the expense (in the currency in which you incur the expense)
- nature of the goods or services
- If this is not mentioned in the document, you can write the missing information in the document yourself. You must do this before filing your tax return
- date when you incur the expense
- If this is not mentioned on the document, you can use your credit card statement, bank statement, or some other reasonable evidence to demonstrate when you paid the expense
- date the document or receipt is created.
If you incur the expense in Australia, the document should be in English. On the other hand, if the expenses are incurred in another country, then the document can be in the language of that country. Your document will be well-prepared with accurate records by getting Melbourne bookkeeping services.
Travel Diary or Record of Your Activity
A travel diary is a document that contains a record of your travel activities. The purpose of a travel diary is to help work out the work-related and private elements of your trip. You can claim deductions for only the work-related part of your expenses. To claim the right deductions, you can seek help from a professional tax accountant. If you want to hire a tax accountant near your office, you can search online for ‘tax accountants near me’.
Do You Need to Keep a Travel Diary?
You don’t need to keep a travel diary if you are away for fewer than 6 nights in a row. If you are away for 6 or more nights in a row, you must maintain a travel diary. If you receive a travel allowance from your employer, there are some situations where you are not required to keep a travel diary, even if you are away for 6 or more nights in a row. Although you are not required to keep a travel diary if your travel journey is for less than 6 nights in a row, you may still find it helpful to keep information about your travel.
How to Keep a Travel Diary
For each activity on your travel journey, you need to record:
- where you were
- what you were doing
- when you stopped for meals
- the date, and start and end times of the trip activity.
Record the activity before it ends. The records in a diary must be in English.
Conclusion
To claim potential tax deductions, you need to maintain records for travel expenses. To ensure accurate records of your travel expenses, you can get reliable bookkeeping services.