As we approach the end of the 2024–25 financial year, now is the final time to review your tax position and take advantage of strategies to legally minimise your tax liability. Below are key areas to consider before 30 June 2025, along with important changes taking effect from 1 July 2025.
For Individuals
1. Prepay Deductible Expenses
-Consider prepaying expenses such as income protection insurance, professional subscriptions, or work-related costs to bring forward deductions into this financial year.
2. Claim Work-Related Deductions
-Ensure all eligible work-related expenses are recorded and substantiated with receipts (e.g. home office, tools, uniform, self-education).
3. Review Investment Portfolios
-Consider realising capital losses to offset capital gains. Be aware of the 12-month rule for CGT discounts.
4. Contribute to Superannuation
-Consider making personal deductible contributions up to the $30,000 concessional cap
-Don’t forget to submit a Notice of Intent to Claim to your super fund before lodging your return
-Check for carry-forward unused concessional contributions from the previous five years if your balance is below $500,000
For Small Business Owners
1. Write-Off Bad Debts
-If you have trade debtors unlikely to pay, write them off before 30 June to claim a deduction.
2. Review Aged Receivables and Inventory
– Identify obsolete or slow-moving stock and write them down to reflect current value. This reduces taxable income.
3. Small Business Instant Asset Write-Off
-The $20,000 instant asset write-off remains available for eligible small businesses for the 2024–25 financial year
-Applies on a per asset basis and only if the asset is first used or installed ready for use by 30 June 2025.
4. Pay Superannuation Before 30 June
-Super is only deductible when paid. To claim a deduction in FY25, ensure employee super is paid and received by the fund before 30 June.
5. Prepay Expenses
-Small businesses may prepay up to 12 months of certain expenses (e.g. rent, insurance, subscriptions) and claim a deduction.
What’s Changing for FY2026 (from 1 July 2025)?
1. Superannuation Guarantee Rate Increases to 12%
• Effective 1 July 2025, the Super Guarantee (SG) rate will increase from 11.5% to 12%.
• This is the final scheduled increase under the legislated gradual SG changes.
• Employers should update their payroll systems to reflect this rate.
2. ATO interest charges incurred on or after 1 July 2025
Any GIC or SIC incurred on or after 1 July 2025 is not deductible regardless of whether the debt relates to an earlier income year.
As they are not deductible, any GIC or SIC that is later remitted will no longer need to be included as assessable income.
3.Extending the instant asset write-off for small business
An increase to the $1,000 instant asset write-off threshold has been a consistent feature of federal budgets by various governments as an incentive for small business investment.
The extension of the increased instant asset write-off threshold to $20,000 for the 2024-25 financial was passed by Parliament on 26 March 2025.
4.Working from home deductions
For those working from home there are two methods to calculate deductions:
Fixed rate method: claim 70 cents per hour (2025 financial year) for additional running expenses such as electricity, internet and phone usage even if you don’t have a dedicated home office. This method can only be used if you have recorded the actual number of hours you worked from home across the income year. A reasonable estimate isn’t enough.
Actual cost method: claim the actual expenses incurred, with records to substantiate the claims. This method potentially enables a larger deduction to be claimed, but the record keeping obligations are more onerous.
It’s important to note that double dipping is not allowed. For instance, if you claim deductions using the fixed rate method you can’t separately claim a deduction for your mobile phone costs.
Other EOFY Business Reminders
• STP Finalisation: Finalise payroll through Single Touch Payroll (STP) by 14 July 2025.
• Super Guarantee (SGC) Contributions:
Super for the April–June 2025 quarter must be received by the fund by 28 July 2025 to be deductible
• Trust Resolutions: Ensure trust distribution resolutions are properly documented before 30 June.
• TPAR: If you pay contractors in certain industries (e.g. building, courier, cleaning), lodge the Taxable Payments Annual Report (TPAR) by 28 August 2025.
