Tax time in Australia arrives every year with the same certainty as winter — and the same tendency to catch people underprepared. With the financial year ending on 30 June, now is the time to get your records in order, understand what you can and cannot claim, and make sure you are lodging a return that truly reflects your entitlements. Whether you are a salaried employee, a contractor, an investor, or a retiree, the rules affect you — and knowing them well can mean the difference between a disappointing bill and a welcome refund.
Understanding Your Tax Obligations
Every Australian resident who earns taxable income above the tax-free threshold of $18,200 is required to lodge an income tax return with the Australian Taxation Office (ATO). Even if you earn below this threshold, you may still need to lodge in certain circumstances — for example, if you had tax withheld from your income during the year or you believe you are entitled to a refund.
On top of income tax, most Australians also pay the Medicare Levy, which sits at 2% of taxable income. Reduced rates or full exemptions apply if your income falls below certain thresholds — for singles, the 2025–26 base tier threshold is $101,000. Those on higher incomes without private hospital cover may also face the Medicare Levy Surcharge.
What Income Must You Declare?
The ATO requires you to declare all assessable income — and this goes well beyond your salary or wages. You must include interest earned on bank accounts, dividends from shares, rental income from investment properties, capital gains from the sale of assets, income from freelance or gig economy work, and eligible government payments. If you have an income statement from your employer, it will be pre-filled in myTax via your myGov account — but the responsibility for accuracy rests with you, and it pays to review every line carefully before lodging.
Capital gains deserve particular attention. If you sold shares, an investment property, or other assets during the financial year, the profit is generally assessable as a capital gain. However, if you held the asset for more than 12 months before selling, you may be eligible for the 50% CGT discount, which halves the assessable gain before it is added to your taxable income. This is one of the most valuable concessions in the individual tax system and well worth understanding before you sell anything.
Deductions: Where Most Australians Leave Money Behind
This is where many people miss out. The ATO allows you to claim deductions for expenses directly related to earning your income, provided they are not reimbursed by your employer and you have the records to prove them.
For employees, common deductions include professional development and training courses directly related to your current job, protective clothing and work uniforms (and the cost of washing them), union and professional association fees, tools and equipment used in your work, and home office costs. The revised fixed-rate method of 70 cents per hour can be used to calculate home office expenses — it covers electricity, internet, phone usage, and stationery. You do need to keep a record of the hours you worked from home, but you do not need to apportion individual bills.
Work-related car expenses are also claimable when you use your personal vehicle for work travel — excluding the everyday trip between home and your regular place of work. For 2025–26, the cents-per-kilometre rate is 88 cents per kilometre for up to 5,000 kilometres, and no logbook is required. If you drive more than 5,000 kilometres for work, the logbook method may deliver a larger deduction.
Self-education expenses are deductible when your study directly maintains or improves skills for your current role. Income protection insurance premiums are also deductible (life insurance is not), as are tax agent fees from the prior year and interest on money borrowed to invest in income-producing assets such as shares or managed funds.
Offsets That Reduce Your Tax Bill Directly
Tax offsets reduce the amount of tax you owe dollar-for-dollar after it has been calculated. The Low-Income Tax Offset (LITO) provides up to $700 in relief for individuals earning under $66,667, with the full benefit available to those earning $37,500 or less. This effectively means most individuals earning up to approximately $22,575 pay no income tax at all when the offset is applied. The Low- and Middle-Income Tax Offset (LMITO) was a temporary measure that ended after the 2021–22 income year and no longer applies.
Senior Australians may be eligible for the Seniors and Pensioners Tax Offset (SAPTO), which can substantially reduce or eliminate tax liability depending on income and relationship status.
Lodgement Deadlines and How to Lodge
Individuals lodging their own return through myTax have until 31 October each year. If you engage a registered tax agent like JR Corporate Accountants, you may qualify for an extended deadline — often as late as May of the following year — provided you are registered with your agent before 31 October. Missing the lodgement deadline without an extension can result in Failure to Lodge penalties from the ATO, which compound over time.
Why Working with a Professional Pays Off
Australia’s tax system is self-assessing, which means the burden of getting it right sits with you. The ATO has powerful data-matching tools that cross-reference information from employers, banks, share registries, and state revenue offices. Errors — whether through oversight or misunderstanding — can trigger audits and penalties.
A registered tax agent does far more than fill in a form. They identify deductions you might not know about, ensure your return reflects your true entitlements, and provide representation if the ATO comes knocking. At JR Corporate Accountants, our team has more than 20 years of experience helping everyday Australians get the most from their returns and stay on the right side of the ATO. Whether this is your first return or your fiftieth, professional advice is one of the best financial investments you can make before 30 June.
Ready to maximise your 2025–26 return? Contact JR Corporate Accountants today for a free consultation.
This article contains general information only and is based on ATO guidance current as at June 2025. Please seek professional advice for your specific circumstances. Source: Australian Taxation Office (ato.gov.au)