Substantiation (proving a deduction)
The records that turn a claim into a defensible deduction.
Substantiation is your evidence that a deduction is real and work-related — receipts, invoices, bank statements, a logbook or a diary. The ATO’s position is simple: if you can’t show it, you can’t claim it. Records generally need to be kept for five years from lodgment.
Worked example
A $400 monitor bought for work needs the receipt and a sensible work-use share. Use it 80% for work and you claim $320 — with the record to back the 80% up.
Common mistake
Relying on a bank statement alone. It proves you spent money, not what you bought or why it was work-related — which is the part that actually gets tested.
Grounded in ATO guidance. Figures last checked . General information, not tax advice.
Related terms
Tax deduction vs tax offset
A deduction lowers income taxed; an offset lowers tax owed.
Logbook method (car expenses)
Claim your car’s real business-use share of running costs.
Tax invoice
The GST-compliant invoice that lets a buyer claim the GST back.
Depreciation (decline in value)
Claiming the cost of a big asset gradually over its life.
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Questions about this term
Substantiation (proving a deduction): common questions
- What does a bank statement fail to prove about a deduction?
- What you bought and why it was work-related. A bank statement proves you spent money, and that is all — the part that actually gets tested is the purpose. Receipts, invoices, a logbook or a diary are what turn a claim into a defensible deduction.
- How long do I need to keep the records behind a deduction?
- Generally five years from lodgment. The ATO’s position is simple — if you can’t show it, you can’t claim it — so the receipts, invoices, logbook or diary behind a claim need to survive for that period rather than the current year alone.
- How do I substantiate a purchase that is partly private?
- Keep the receipt and a sensible basis for the work-use share. A $400 monitor used 80% for work supports a $320 claim, provided you can show where the 80% came from. The receipt covers the purchase; the record of the split covers the proportion.
- Are receipts the only acceptable evidence?
- No — invoices, bank statements, a logbook or a diary all count, and the right one depends on the claim. A car claim leans on a logbook; a work-use share leans on a diary or record of how it was worked out. What matters is that the evidence shows the expense was real and work-related.
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