Top 10 Tax Return Tips for the 2024-2025 Financial Year

With the end of the 2024-2025 financial year approaching, now is the perfect time to prepare for your tax return. The Australian Taxation Office (ATO) has introduced several changes this year, and understanding these updates can help you maximize your refund and ensure compliance.

Our tax experts have compiled the top 10 tips to help you navigate this tax season with confidence and potentially increase your refund.

1. Take Advantage of the New Work-Related Expense Rules

The ATO has introduced simplified methods for claiming work-related expenses in the 2024-2025 financial year. Under the new rules:

• You can claim a standard deduction of $0.75 per work hour for home office expenses without detailed records
• For those who maintain comprehensive records, the rate has increased to $0.90 per hour
• Professional membership fees up to $300 can now be claimed without receipts (increased from $150)

These simplified methods can save you time while ensuring you claim what you're entitled to. For larger claims, you'll still need to use the actual cost method and keep detailed records.

2. Maximize Your Superannuation Contributions

Making personal contributions to your superannuation can be an effective way to reduce your taxable income while building your retirement savings. For the 2024-2025 financial year:

• The concessional contributions cap is $30,000 (or $35,000 if you're 50 or older)
• You can utilize the "carry-forward" rule if your super balance is less than $500,000
• Personal contributions are taxed at 15% within your super fund, which is likely lower than your marginal tax rate

Important: Personal super contributions must be made before June 30, 2025, and you must lodge a Notice of Intent to Claim with your super fund to claim the deduction.

3. Review and Consolidate Your Healthcare Expenses

The Medicare Levy Surcharge and Private Health Insurance Rebate thresholds have been adjusted for 2024-2025. If your annual medical expenses are substantial:

• Consider prepaying next year's private health insurance premium before June 30
• Check if you qualify for the increased net medical expenses tax offset
• Remember that only expenses that exceed $2,400 (for individuals) or $4,800 (for families) can be claimed

Consolidating medical treatments and procedures within one financial year might help you reach the threshold.

4. Understand the New Digital Assets Reporting Requirements

Cryptocurrency and NFT transactions are under increased scrutiny from the ATO. New for 2024-2025:

• All crypto exchanges are now required to report transaction data directly to the ATO
• NFT sales are explicitly classified as CGT events
• The 50% CGT discount is still available for digital assets held for more than 12 months

Maintain detailed records of all your digital asset activities, including dates, values, and fees for each transaction.

5. Claim Work-Related Education and Upskilling

With the evolving workplace, the ATO has expanded deductions for education:

• Course fees for work-related education are deductible if they maintain or improve skills needed in your current employment
• Online learning subscriptions can now be claimed if they relate to your profession
• Travel expenses to attend courses or seminars may be deductible
• Home office expenses while studying for work-related education can be claimed

Remember that courses that help you get a new job in a different field are not deductible.

6. Leverage the Small Business Instant Asset Write-Off

If you're a small business owner, take advantage of the expanded instant asset write-off before it changes:

• The instant asset write-off threshold remains at $20,000 for businesses with an aggregated turnover of less than $10 million
• Assets must be first used or installed ready for use by June 30, 2025
• Multiple assets can be claimed as long as each is under the threshold
• Second-hand assets are eligible under the scheme

This is particularly valuable if you need to upgrade equipment or purchase new assets for your business.

7. Don't Forget the Expanded Work-From-Home Rule Changes

With hybrid work becoming the norm, the ATO has updated its guidance on work-from-home deductions:

• Internet and phone usage can now be claimed based on a simplified percentage calculation
• Home office furniture depreciation has been streamlined
• Electricity and gas costs for heating, cooling, and lighting your work area are claimable
• Computer consumables and stationery can be claimed in full if used for work purposes

The key is to maintain a logbook or diary for at least four weeks to establish your work pattern at home.

8. Prepay Deductible Expenses to Bring Forward Deductions

If you expect to be in the same or higher tax bracket next year, consider prepaying some expenses to claim them this financial year:

• Interest on investment loans
• Professional subscriptions and memberships
• Income protection insurance premiums
• Work-related conference registrations or prepaid courses

Be aware that prepaid expenses are generally only deductible in the current year if they cost less than $1,000 or relate to a period of 12 months or less.

9. Review Your Investment Property Deductions

Property investors should be aware of several important changes this year:

• The depreciation rules have been updated to allow higher claims for newer properties
• Travel expenses to inspect rental properties remain non-deductible
• Interest on loans is only deductible if the property is available for rent or actually rented
• Repairs versus improvements: repairs are immediately deductible, while improvements must be depreciated

Consider obtaining a quantity surveyor's report if you haven't already, as this can identify many depreciable items you might otherwise miss.

10. Seek Professional Advice for Complex Situations

While online tax platforms can handle most standard tax returns, certain situations benefit from professional advice:

• If you've sold significant assets and need to calculate capital gains tax
• If you have foreign income or assets
• If you've started or closed a business during the year
• If you're dealing with complex trust or partnership structures

A registered tax agent's fee is tax-deductible in the following year, and the value of proper advice often far exceeds the cost.

Bonus Tip: Don't Miss the Updated Tax Offset Changes

The low and middle income tax offset has been replaced with adjusted tax brackets and base tax offset. Ensure you're aware of how these changes affect your specific situation.

"Being organized and proactive about your tax affairs can make a significant difference to your refund amount. The key is to start gathering your documentation early and stay informed about the latest changes."

Remember, the ATO has sophisticated data matching capabilities and receives information from banks, employers, government agencies, and many other sources. It's always best to be truthful and accurate in your tax return.

To make your tax return process even simpler this year, consider using Taxo.au's online platform, which guides you through all these considerations and helps maximize your legitimate deductions while ensuring compliance.