2025 Personal Tax planning

The end of the tax year is fast approaching, so take action now to reduce your tax for 2025.

Follow as many of these steps as you can and have more money in your pocket for you and your family to enjoy.

Personal Tax

Home Office Expenses 

If you have been working from home, you may have expenses you can claim a tax deduction for. The ATO allows you to claim using a “Revised Fixed Rate Method” an amount of $0.70c per work hour for the 2025 year. This amount covers most expenses from working from home, and you need to keep a contemporaneous (real-time) record of the number of hours you are claiming. 

The second method that can be used, is the actual cost method. This would require a home office that no other members of the household use and you would need to know for example how much additional electricity is used for work purposes. The record keeping for this method is onerous, but it could work out to be a larger deduction than the fixed rate method.

Refer to our blog for more specific information about Home Office expenses.

Superannuation Contributions

You can contribute into superannuation, a personal contribution up to $30 000, but this would include your employer contributions. So, if your employer has contributed $10 000, you can make a personal contribution of $20 000.

In order to claim this non-employer contribution as a deduction, you would need to give your fund a form called “a notice of intent to claim” and receive an acknowledgment letter from your fund.

These contributions would then be taxed at 15% in the super fund if your income is less than $250 000 or at 30% if above this amount.

The funds need to be deposited into the superfund account by 30 June in order to be claimed in 2025.

Carried Forward Contributions to Super

If your super account balance is less than $500 000 and you haven’t used the full amount of your contribution cap in previous years starting from  2019, you can use the previously unused amounts for up to five years as per the table below. ie You can contribute more than $30 000 into super. 

Please check with us what your unused concessional contributions are.

Spouse Super Contributions

If your spouse’s income is less than $37 000 p.a  and you make a contribution into their super account of up to $3 000, you will receive a tax offset of $540.

This offset reduces to nil as their income increases to $40 000 p.a

Government Co-Contribution to super

If you are a low-income earner and you make a non-concessional contribution of $1 000 into super and you earn less than  $45 400 in 2025, the government will pay into your super account $500.

You can’t claim this non-concessional contribution as a tax deduction against your income.

The Co-contribution will decease if less than $1 000 is contributed and as your salary increased up to $60 400.

Investment Property Depreciation Report

Investors who have purchased an established (not brand new) residential investment property after 7.30pm on 9th May 2017 can’t claim depreciation on secondhand assets. You will be able to claim depreciation on new equipment only and the building structure (Capital Works). You will need to have a Depreciation Report prepared by a quantity surveyor in order to do this.

The report should cost around $600 dollars, which is a deductible expense, but results in thousands of dollars of non-cash flow deductions over the years.

Investment Property Repair & Maintenance

Investment property owners should carry out repairs and maintenance  because of wear & tear or damage from tenants before 30 June. All repairs would be tax deductible. Be careful, as an improvement to the property is not a repair and would not be immediately deductible.

Motor Vehicle Expenses

In order to claim motor vehicle expenses against your salary income, you would need to prove that you have done travelling for work purposes.

The way to do this, is to keep a record or logbook of your travel for at least 12 weeks during the year. This record is valid for 5 years unless your travel pattern changes before then.

You should also record your odometer reading at 30 June 2025.

The percentage of work travel would be calculated from this record and applied to the total of your motor vehicle expenses and claimed as a deduction.

An alternative method where no log book is needed, is to simply claim up to a maximum of 5 000 km business travel, based on a reasonable estimate, using the cents per km method. For 2025, 88 cents per km can be claimed. 

Here is a link to a website called Drivers note, where you can download an excel log book or even better an App. Please contact our offices should you have any questions or need help in using it. 

Prepay Expenses

If you own investments such as shares or property, and you pay up to 12 months in advance of interest on a loan or other expenses before 30 June 2025, you will be able to claim these amounts in the 2025 tax year.

You may also prepay other expenses like property repairs, memberships, subscriptions or journals.

Income Protection Insurance Premiums

If you are unable to work as result of sickness or an accident, Income Protection Insurance will replace up to 75% of your salary. These premiums are tax deductible and protect your family’s lifestyle.

These premiums can also be prepaid for up to 12 months and claimed as a deduction in 2025.

Investment Capital Gains & Losses as an Investor

If you are defined as an investor, any capital gains you may have realised during the year will be added to your salary income and tax applied to this total less your expenses. If you are defined to be running a business rather than investing, then CGT does not apply. If any of your investments have decreased in value since you bought them and you decide to sell them, you can reduce the tax you pay on capital gains by this loss. You can’t claim a loss just because the market value has decreased, you must sell the asset in order to use the loss. Be careful of being caught in a wash-sale arrangement where the ATO will not allow you to claim the loss against the profit. This will apply if the intention of the sale is to reduce a tax liability.

If your losses are greater than the gains, then the unused capital losses can be offset against future capital gains.

Even if you have only made capital losses, you still need to disclose these losses on your tax return.

These laws apply also to the most common type of investments like shares, investment properties and crypto currencies.

Hold Investments for longer than 12 months

An investor is entitled to a 50% discount on a Capital gain if they sell an asset after holding it for 12 months. If you are expecting a profit on the sale, then try hold it for 12 months and you will reduce your gain by 50%. 

Defer Investment Gains

Arrange for the contract date of sale of a Capital Gain asset to occur after 30 June 2025 as then the gain will fall into the 2026 tax year.

The contract date and not the settlement date is the key date for working out when a sale occurs for CGT purposes.

Make a donation to a DGR Charity

You can do a good deed and make a donation to a deductible gift recipient (DGR) charity. These donations are tax-deductible. There is no limit as to how much you can claim. Any donation of more than $2 and as long as you have a receipt, will allow you to make a tax claim. You will find a list of these charities by clicking here.

Private Health Insurance – hospital cover

Having your own private health insurance hospital cover, if you earn over $97 000 as a single or $194 000 as a family, would prevent you from paying the Medicare Levy Surcharge which ranges from 1% to 1.5%. 

Extras cover does not affect the surcharge.

Take out the cover as soon as you can as the surcharge is calculated on the number of days you didn’t have cover. If you take out cover before 30 June, you will only get the full benefit for the 2026 tax year.

If you intend to travel overseas during the year and you cancel your private hospital cover for this period, you will be liable for the surcharge for these travel days, so compare the premium you will save to the surcharge payable. 

Private Health Insurance – Rebate amount

The government pays a rebate for private health insurance in order to encourage people to take out private cover. 

The rebate can be paid as an upfront reduction to your premium payments, or as a refundable tax offset on your tax return.

If you see the phrase “excess private health insurance premium reduction or refund” on your tax return, you might owe money.

For example, for the oldest person under 65 years old on the policy, the rebates range from 0% (income above $151 001) to 24% (less than $97 000) for a single person.  For a family, the rebates range from 0% (income above $302 001) to 24% (less than $194 000).

As the age of the oldest person increases, so do the rebate percentages.

It is very important to notify your medical fund of your income as it changes, otherwise you will have to pay extra tax at year end if you have received more of a rebate then you should have. Another option is to not receive the rebate monthly, but wait for your tax return to be submitted and the rebate will reduce the tax you need to pay.

Salary Sacrifice an Electric Vehicle

A novated lease on an electric vehicle through salary sacrifice could save you tax. These vehicles are also exempt from fringe benefits tax for the employer. 

Keep records of all your expenses

The ATO today, is far more likely to ask to see proof of your tax deductions than they were a few years ago. If you can’t present the source documents, they will reverse your expense claims. Dedicate a few minutes on a regular basis to download receipts/invoices into a cloud folder. You do not need to retain the physical copies if they are stored in the cloud.

Take a photo of the receipt/invoice while in the store and then move it into the cloud folder. 

To see what you can do to minimise your business tax click here.

Should you have any questions specific to your situation, contact us at questions@accoladeaccounting.com.au or contact  Accolade Accounting on (08) 6263 4466 or (03)  9524 3145 to get further advice.