Tax Planning Guide for FY25: Your Path to Stress-Free Tax Time

Written by Daniel Dubois

Tax season is upon us—a time to maximize your deductions and plan strategically for the financial year ahead. Whether you're an individual or a small business owner, this guide is designed to help you stay on top of your tax responsibilities with ease.

1. Understand Your Deductions

Your tax return can benefit greatly from claiming legitimate deductions. Here’s what you can consider:

  • Home Office Expenses: Claimable on a cents-per-hour basis under the ATO’s safe harbour rules, or based on actual costs with detailed records.

  • Work-Related Travel: Motor vehicle travel is calculated per kilometre, while other travel is deductible if directly connected to your work. Personal trips don’t qualify.

  • Self-Education: Courses directly related to your job can be claimed. General hobbies—like mastering sourdough—are not eligible.

  • Donations: Contributions to DGR-registered entities are deductible. Keep receipts handy and avoid claiming non-eligible donations like local raffles.

2. Boost Your Super Contributions

Making additional concessional contributions to your superannuation (up to $30,000 total, including employer contributions) can help reduce your taxable income. You may even take advantage of unused concessional caps from the past five years if your balance is below $500,000. Employers should also ensure super payments are made before the end of June to secure deductions for this financial year.

3. Investment Property Considerations

If you own a rental property, make sure to claim:

  • Depreciation and Building Allowance: Applicable for properties under 25 years old.

  • Interest on Investment Loans: Deduct only the portion used for rental property-related expenses.

  • Property Management Fees: Fully deductible.

Note that the ATO closely scrutinizes rental property claims, so ensure your records are accurate and thorough.

4. Private Health Insurance: Save on Medicare Levy Surcharge

High-income earners without private hospital cover may face the Medicare Levy Surcharge. A basic private plan could cost less than the surcharge itself. Keep in mind that the Private Health Insurance Rebate is income-tested for those earning above $97,000 (singles) or $194,000 (families), with adjustments for each dependent.

5. Capital Gains Tax (CGT) Strategy

  • Long-Term Gains: Assets held for over 12 months qualify for a 50% CGT discount.

  • Offset Losses: Use capital losses to reduce taxable gains. Consider selling underperforming assets for added relief.

  • Cryptocurrency Transactions: Must be reported, so maintain thorough records.

6. Navigating Division 293 Tax

Earning over $250,000 triggers an additional 15% tax on concessional super contributions, bringing the total to 30%. While still lower than the top marginal rate, strategic income planning across financial years may help minimize the impact.

Tax planning doesn’t have to be overwhelming. For expert advice tailored to your situation, reach out to us at Salt—we’re here to make tax time a breeze.

Jenni Anderson