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Record Keeping & Audit-Proofing Your Return

How to keep the right records, avoid common audit triggers, and survive an ATO review.

How Long You Must Keep Records

The ATO requires you to keep all tax records for 5 years from the date you lodged your tax return. This applies even if you change jobs, move, or stop working in nursing.

If you dispose of an asset (e.g. sell a stethoscope you claimed), keep records for 5 years after the disposal. If you are under audit, keep everything until the audit concludes — even if that passes the 5-year mark.

What Records to Keep

The ATO expects you to be able to substantiate every deduction you claim. The table below covers the main record types every nurse should maintain.

Receipts & Invoices

Keep itemised receipts showing: supplier name, date, description of goods, amount paid, and ABN. For online purchases, a confirmation email or PDF receipt is sufficient.

Bank & Credit Card Statements

Statements showing work-related transactions can serve as supporting evidence alongside your own summary. Highlight or annotate work-related items to make your records audit-ready.

Logbooks & Diaries

You need contemporaneous records — created at or near the time of the expense. Backdated diaries are not acceptable if audited.

The $300 Threshold Explained

For work-related expenses under $300, you do not need a formal receipt — but you still need to be able to explain how you calculated the claim. The ATO can still request evidence, and if you cannot provide a reasonable basis, they may disallow the claim.

Important: The $300 threshold applies per item, not per total claim. A $350 stethoscope requires a receipt; a $250 pair of non-slip shoes does not (though still recommended).

Laundry Diary Requirements

If your total laundry claim is $150 or less, no written evidence is needed. If you claim more than $150, you must keep a diary of loads for at least 4 weeks as a representative period, showing:

• Date of each wash load
• Whether it was a work-only load or mixed load
• Number of items in the load
• How you calculated the cost ($1 per work-only load, 50¢ per mixed load)

Vehicle Logbook Requirements

To claim car expenses using the logbook method, you must maintain a valid logbook for a continuous minimum 12-week period. Once established, a logbook is valid for 5 years, unless your circumstances change significantly.

Your logbook must record for each trip: date, destination, purpose (including patient visits, conferences, shift A to shift B), odometer start and end readings, and kilometres travelled.

Phone & Internet Diary

If you claim work-related phone and internet usage, the ATO expects a 4-week representative diary showing the proportion of work vs personal use. This is especially important if you use your phone for:

• Rostering apps and shift swaps
• Work-related calls and texts to colleagues or managers
• Accessing work email, policies, or training portals
• Telehealth consultations

After completing the 4-week diary, you can apply that work-use percentage to your full-year bill. The ATO will generally accept a diary done once unless your usage pattern changes significantly.

Working From Home Time Records

If you do any work-from-home tasks (e.g. mandatory online training, CPD modules, shift planning), keep a record of hours worked. The ATO requires:

• A diary or timesheet of actual hours worked from home
• A record of what you did (e.g. "Completed mandatory manual handling refresher course")
• If using the fixed-rate method, multiply total hours by the set hourly rate (67¢ per hour for 2024–25)

ATO myDeductions App

The myDeductions app (part of the ATO's online services) is a free tool that lets you photograph and store receipts, log kilometres, and record expenses throughout the year. At tax time, you can export the data directly to your tax agent or upload it with your return.

Digital Copies Are Acceptable

The ATO accepts digital copies of receipts and records as long as they are legible and complete. You do not need to keep paper originals. Scan or photograph paper receipts and store them in the cloud (Google Drive, Dropbox, iCloud) or the myDeductions app.

Keep a backup. If your phone is lost or stolen, cloud-synced records are the difference between a smooth tax return and a panic.

Checklist: What to Keep and For How Long

Record Type	Keep For	Notes
Receipts for work expenses under $300	5 years from lodgement	Keep even if not strictly required
Receipts for work expenses over $300	5 years from lodgement	Mandatory — must be itemised
Vehicle logbook	5 years from lodgement	Valid for 5 years once established
Laundry diary	5 years from lodgement	4-week representative period if over $150
Phone/internet diary	5 years from lodgement	4-week period, redo if usage changes
WFH hours record	5 years from lodgement	Timesheet or diary of actual hours
Bank/credit card statements	5 years from lodgement	Annotate work-related items
Employer declarations (e.g. uniform)	5 years from lodgement	Letter or email confirming requirements
Asset purchase (over $300)	5 years after disposal	Keep until disposal plus 5 years

What Happens in an ATO Audit

The ATO conducts audits (also called compliance reviews or "review actions") to check that claims are supported by evidence. An audit typically follows this process:

1. Notification — You receive a letter or phone call advising that your return has been selected for review. This can happen months or even years after lodgement.
2. Information request — The ATO asks for specific records (e.g. "Provide receipts for your laundry claim of $250"). You typically have 28 days to respond.
3. Review — An ATO officer examines your records against your claims. They compare amounts, dates, and patterns.
4. Outcome — Claims with adequate evidence are accepted. Claims without evidence may be disallowed, resulting in an amended assessment and a bill for the tax shortfall plus interest and possibly penalties.

Common Nurse Audit Triggers

The ATO uses data analytics to flag returns that deviate from expected patterns for a profession. Nurses can be flagged for:

• Large laundry claims — Claiming $300+ in laundry without a diary. Expect a review letter.
• Missing logbooks — Claiming car expenses using the logbook method without a contemporaneous logbook.
• High uniform claims without employer evidence — Claiming uniform expenses without a letter or policy from your employer confirming the uniform is compulsory.
• Claiming ordinary clothing — Everyday items like plain scrubs (if not compulsory), sneakers worn outside work, or regular clothing.
• Large self-education claims — A significant study-related deduction can trigger a review if it seems mismatched with your role.
• Consistent round-figure claims — Claiming exactly $300 every year (the no-receipt threshold) across multiple categories may look suspicious.