Your key tax considerations as the financial year winds up
From home office expenses to individual tax rates, here’s what you need to know as the financial year draws to a close.
As the 2024/25 financial year draws to a close, both individuals and organisations should consider the key tax planning and compliance issues they need to attend to by 30 June.
In this year’s BDO year-end tax bulletin, we summarise the key tax measures from the 2025 Federal Budget and important updates from the last financial year. In addition, we outline ongoing year-end issues and considerations for taxpayers.
Covering a wide range of topics that are relevant to your specific tax planning needs, the bulletin includes:
- Individuals
- Trusts
- Investment and Capital Gains Tax
- Companies
- Employment
- Tax accounting
- Compliance.
Individuals
There has been a change to the individual income tax rates for the 2025/26 and subsequent financial year.
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Personal income tax rates for the income threshold $18,200 to $45,000 from 16 per cent to 15 per cent from 1 July 2026 and 14 per cent from 1 July 2027.
There is no change to the income tax rates for the 2024/25 financial year. At the time of writing there are no pending changes to individual tax rates for the 2025/26 tax year.
The Medicare Levy is payable in addition for qualifying taxpayers.
The Medicare levy low-income thresholds have been announced to be increased from 1 July 2024 to provide cost-of-living relief as follows:
- Singles $27,222
- Couples $45,907 with an additional $4216 for each dependent child/student
- Single seniors and pensioners $43,020
- Family seniors and pensioners $59,886
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Income tax deductions
Home office expenses:
Taxpayers who are claiming home office expenses must comply with the Tax Office’s requirements which cover eligibility to claim additional running expenses, and expenses you cannot claim.
The costs you cannot claim include general household items such as tea and coffee, employer provided items and employer reimbursed items.
Substantiation:
Where you are claiming deductions for work-related expenditure such as laundry, travel expenses, car expenses and phone or internet expenses, you must comply with the substantiation provisions.
These rules may require you to maintain logbooks and diaries, and to retain invoices and documentation.
The BDO 2025 year-end tax bulletin provides an outline to help manage your compulsory tax compliance and year-end tax liabilities, but please note this is not comprehensive. Before acting on the information provided, you should consider your circumstances and consult your BDO tax adviser to receive tailored advice or discuss our available tax services.
