With the end of the financial year coming up, it’s a great time to plan smartly. Here are some ways to boost your deductions—and a few areas the ATO is watching closely.
Opportunities
1. Boosting Your Super
If you’re looking to grow your super and haven’t used up your $30,000 concessional cap (which includes employer contributions and salary sacrifice), you may be able to make a personal deductible contribution.
2. Catch-Up Contributions
If your total super balance was under $500,000 on 30 June 2024, you may also be able to use unused cap space from the past 5 years. For example, if you had $8,000 unused each year, you could contribute $40,000 this year and claim the full deduction.
3. Spouse Contributions
If your spouse earns under $37,000, you may be able to claim a $540 tax offset by contributing to their super.
4. Offset Capital Gains
If you’ve made capital gains on shares or property this year, a larger super contribution could help reduce your tax bill.
Note: To claim a deduction, you must be under 75, submit a notice of intent to your fund, and get their acknowledgment before lodging your return. If you’re 67–74, you’ll also need to meet the work test (working 40 hours in a 30-day period).This month has been a bit quieter in terms of tax updates, partly because of the upcoming federal election. However, the ATO has provided another update on some practical issues to consider while we wait for the High Court to decide whether to hear the ATO’s appeal in the Bendel case.
Charitable Donations
Donating to a registered charity (a deductible gift recipient or DGR) can reduce your tax bill. You can claim a tax deduction for gifts of $2 or more.
The more you earn, the more tax you save.
For example:
- A $10,000 donation could save you around $3,200 if you earn $135,000.
- The same donation could save you $4,700 if you earn $190,000 or more (including Medicare levy).
To be deductible, the donation must be a genuine gift—not something in exchange for goods or services. Different rules apply for charity auctions and fundraising events.
Risks
Work From Home Expenses
Working from home is common—but it’s also a hot spot for ATO audits. You can’t claim your coffee, snacks, or toilet paper (yes, people really tried), but you can claim extra costs like electricity and internet.
There are two ways to claim:
1. Fixed Rate (Shortcut) Method
- Claim 70c per hour you work from home (2024–25).
- Covers energy, internet, phone, and office supplies.
- You must keep a log of the exact days and hours worked from home—no estimates allowed.
2. Actual Cost Method
- Claim only the extra work-related portion of your home running costs.
- Keep receipts and a 4-week diary showing your usual work-from-home pattern.
Landlords Beware: ATO Cracks Down on Investment Property Claims
If you own an investment property, you can only claim deductions for expenses incurred while the property is genuinely available for rent. Claims made while it’s used by family/friends, taken off the market, or listed at an unreasonable rent—especially in holiday hotspots—are under scrutiny.
Key ATO focus areas this tax season include:
- Loan Deductions: You can only claim interest on the portion of the loan used for the rental property. If you redraw funds for personal use (e.g., holidays, school fees), you must apportion the interest.
- Repairs vs Capital Improvements: Immediate deductions apply to repairs due to wear and tear from renting. Capital works (e.g., structural changes) are claimed over 40 years at 2.5%. Replacing entire assets like hot water systems are depreciated over time.
- Co-Owned Property: Income and expenses must be claimed in line with your legal ownership. Joint tenants split 50/50; tenants in common must claim their respective shares, regardless of who paid the expenses.
Gig Economy Income
If you earn income from platforms like Airbnb, Uber, YouTube, or Stayz, you must declare it in your tax return.
What counts as income?
All money, appearance fees, and even “gifts” are taxable. For content creators, income is earned when it hits your platform account—not when it’s transferred to your bank.
New ATO reporting rules
- Since 1 July 2023, ride-sharing and short-term rental platforms must report your income to the ATO.
- From 1 July 2024, this expands to all gig platforms.
If you haven’t declared past income, do it now before the ATO catches it and applies penalties
Need support or have questions? Talk to us today about maximising your outcomes and reducing your risk.
