Time to read : 5 Minutes
Two crucial tax dates are relevant right now: June 30 – just passed, and October 31 – fast approaching.
The first one is obviously the end of the tax year… the latter – you may be less aware – is the date your tax return is due. If you use an accountant, you have an extension until April 2026.
But along with ways to boost your refund from your current tax return, now’s the time to apply five powerful strategies to swell the next one – 2025/2026.
And counting down, let’s start with one you can reap the benefits from today.
Tax hack 5: Start getting your refund today
Here we are talking about the refund you would usually get (if you’re owed one) after you do your tax return, but what about in real time… as you earn it?
By simply filling out what’s called a withholding variation on the ATO’s website, you can get your refund in every single pay.
This form simply says that you’re getting taxed too much through the pay-as-you-go system – why you would get a refund – and alternatively, gives it to you in ‘real time’.
And on that point, I have never understood why people voluntarily let the ATO charge them more than needed each pay while they struggle with costs from week-to-week.
Be aware: this option works best if you’re sure your income and deductions will either be the same as the previous years you received a refund or that you have accurately estimated how much you would otherwise be overpaying each week/fortnight/month. If not, you could face an unexpected bill at the end of the tax year.
Tax hack 4: Get an expenses edge
The ATO has signalled that it has two claims in its sites for the returns we are about to complete: work from home expenses and motor vehicle expenses.
Which means you must lay the groundwork now to be able to legitimately claim them this year.
For work from home expenses, you need to either:
a) Start recording every hour you work from home – an electronic calendar like we all use these days is fine. If you do, in 2025/26 you will be able to use the fixed rate method of claiming 70 cents for each hour you work from home in the year.
Be aware: with this method you can’t claim as extras, such as mobile phones and internet costs, but you can depreciate work-related office furniture and technology, and cleaning and repairs of the home office. But if you think claiming every cost separately would be a better way forward for you…
b) Start collecting the evidence of every ‘actual cost’, to use that method. Yes, we are talking about mobile and internet bills, and all relevant expenses. But you must have a dedicated ‘work room’ that has no private use… and then accurately divvy up the amount of each bill that is work-related. The ATO is on the lookout for any over-estimation too.
You also need to take steps now if you want to ‘safely’ claim mileage:
a) Start – and keep for 12 weeks – a logbook. As with home offices above, you then need to calculate the proportion of private versus business use, and this percentage is applied to your actual bills. Alternatively…
b) At a flat rate of 88 cents per kilometre, you can claim 5,000 kilometres a year without receipts for work or business but you need to be able to stand up your number of kilometres. Again, diarising will be key. And, logically, forget about claiming – effectively twice – motor vehicle expenses.
Tax hack 3: Plan to slash capital gains
In an ideal world we would all be paying extra into super – this is not just because it can brighten our future but also because it can immediately reduce your tax.
Making either a before-tax salary sacrifice contribution into super or claiming a tax deduction for an after-tax, personal one has the same effect: the contribution comes straight off your assessable income.
As such, both contribution methods become before tax, which means more goes into your fund than you are out-of-pocket – you don’t pay tax at your marginal rate but at just the 15% super contributions rate.
Setting up a salary sacrifice with your employer is easy and at the beginning of a tax year can significantly reduce your tax. The same goes if you contribute a chunk to super from money you make from investments.
The limit, which includes the super an employer will pay this year on your behalf, is $30,000. But if you had under $500,000 in your fund as at June 30, you can use a mop-up provision of allowances going back four years too, totalling $142,500.
So how do you claim a tax deduction for a super contribution? Simply fill out an “intent to claim” form on your super fund’s website.
And there is a further highly effective super strategy couples can use to minimise tax.
Tax hack 2: Double the love
If a higher earning spouse pays in $3,000 after tax to the super fund of a spouse on less than $40,000, they will receive an up to $540 tax offset.
This is far better than a tax deduction of the type we have been talking about as it is a pure discount on the tax you owe.
So the family gets an immediate cash flow benefit and a future super boost.
💡 If you earn less than $62,488 a year, putting in the equivalent of $19.25 a week into your super won’t reduce your tax, but it can super charge your retirement nest egg. That’s because the government will chip in a ‘free’ $500 if you do. Find out more about government contributions.
Tax hack 1: Prepare for the Division 296 tax reform
According to the government, only around 80,000 Aussies would be impacted by the Division 296 reforms in the first year – but that said – it could have big implications to this group. The new tax was due to come into effect on 1 July 2025 but at the time of writing has not been legislated.
So what is the reform? Aussies with super balances over $3 million would have to pay an additional 15% tax each year (in other words 30%) on the portion of earnings above $3 million. This rule would apply even if nothing has been sold to realise these gains.
The reform could be a major concern for Aussies with self-managed super funds, especially those established to hold business property or farms. Talk to a finance professional whether it’s worth obtaining a valuation on your assets and how you may be able to prepare for the new tax.
Bottom line
Whatever you do, don’t be tempted to fudge or exaggerate your tax claims… the ATO’s data matching is better than ever before and the penalties, at 25% to 75% of the tax owed, are steep.
Instead, set yourself up to claim large and legitimate deductions this year, in particular for mileage, your home office and super contributions.
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