Document Storage – What are the rules?
The end of financial year is approaching and it’s time to start gathering all your information to prepare for your tax returns. Some of us have filing cabinets overflowing with paper, some of us have documents in our spare room filling up cupboards and wardrobes and some of us have paper all over our workplace.
So what are the rules about document storage? How much do we need to keep and how long do we need it?
In terms of your personal records, the Australian Taxation Office (ATO) requires that personal written evidence must be kept for 5 years from the date you lodge your tax return (refer to www.ato.gov.au). This is the minimum period of time and may be potentially longer if you are claiming losses. Documents you need to keep include;
- Payments you have received.
- Expenses related to payments you receive.
- When you have acquired or disposed of an asset.
- Gifts, donations and contributions.
- Disability aids or expenses.
In relation to companies, the Australian Security Investment Commission (ASIC) requires businesses and companies to keep financial records for 7 years from the time of the transaction including; financial transactions, wages information, employee records, fringe benefits and capital gains information. Many of these items will be kept by your accountant, but you are also responsible for making sure you have copies.
If you are working in the medical and health industry, the requirements for keeping client records varies depending on the client’s age. A record must be kept for at least 7 years from the date of last entry in the record, but if a patient is less than 18 years old at the date of last entry in the record, the record must be kept until the patient is 25 years old.
Personally we need to keep a wide range of information, but some of the most important documents we need are Wills, insurance policies, mortgage documents, passport and travel documents, banking information and tax returns.
So now you know what documents you need to keep, how do you store it? It’s vital to know that all of these records and documents may be kept electronically, but they must be convertible into hard copy. ASIC states that “hard copy must be made available within a reasonable time to a person who is entitled to inspect the records” (refer to www. asic.gov.au).
Keeping good records isn’t just about being well organised. Proper storage of documents makes it easier for you to meet your legal obligations, manage cash flow and reduce stress at tax time. Ideally your company documents, data back up discs and personal records should also be stored away from your home and office, so major water damage or fire doesn’t potentially destroy your only copies.
Store and More have a wide range of secure long term and short term document storage to meet your needs. Our document storage is an easy and cost effective way of keeping your files secure and is a great way of decluttering your home and office. Give us a call on 52648448 and let us help take the stress out of tax time!