A larger tax refund usually comes from getting the details right, not from chasing deductions you are not entitled to claim. Whether you are an employee, sole trader, investor or small business owner, the practical goal is the same: report all income correctly, claim legitimate deductions in full and keep records that support every amount.
A refund is not a bonus paid by the ATO. It is generally the result of having more tax withheld or paid during the year than your final tax liability. Good tax planning can still improve your position, but it should never involve spending money solely for a deduction or making claims that are private, reimbursed or unsupported.
Start with the foundations
1. Reconcile your income before focusing on deductions
The first tax-saving step is surprisingly simple: make sure your return is complete and accurate before adding deductions. ATO pre-fill information is useful, but it should be checked against your own records, particularly where income comes from more than one source.
Review items such as:
– salary, wages, bonuses and allowances
– bank interest and investment distributions
– dividends
– rental income
– income from sole trader work, contracting or side jobs
– digital-platform or sharing-economy income
– capital gains from selling shares, property, crypto assets or other investments
– foreign income and reportable employer benefits, where relevant.
Do not assume pre-fill information captures everything, or that an amount appearing in pre-fill is automatically correct. If your employer income statement is not tax-ready, for example, it may still be subject to change.
Getting income right protects you from an amended assessment later and gives you a reliable base for working out what deductions are genuinely available.
2. Treat records as part of your tax strategy
Records are not an administrative chore to deal with at EOFY. They are what turn an eligible expense into a supportable tax deduction.
For most work-related deductions, you need to be able to show that you incurred the expense yourself, it relates directly to earning your income and you were not reimbursed. A bank transaction alone may not always explain what was purchased or how it was connected to your work, so retain invoices, receipts, diary notes and relevant emails where possible.
A practical system might include:
– a dedicated folder or app for receipts
– scanned copies of paper invoices
– a running log of work travel and work-from-home hours
– notes explaining mixed work and private expenses
– separate business bank accounts and cards for sole traders and business owners
– records retained for the required period after lodging your return.
The most effective record-keeping is regular. Spending a few minutes each week categorising transactions is much easier than reconstructing an entire financial year in June.
Make employment deductions work harder, without overclaiming
3. Review work-related expenses against your actual duties
Employees can often overlook genuine costs of doing their job. The key question is not whether an expense feels work-related, but whether it was incurred in the course of earning employment income.
Depending on your role, eligible expenses may include the work-related portion of:
– tools, equipment and protective items
– union and professional association fees
– licences, registrations and subscriptions required for your work
– relevant professional journals
– eligible self-education expenses
– phone and internet costs
– computers, software and equipment used for work
– repairs, maintenance and decline in value of eligible work assets
– occupation-specific clothing, protective clothing or compulsory uniforms.
The private component must always be excluded. For example, an ordinary wardrobe is not deductible simply because you wear it to work. Similarly, an expense paid by your employer or reimbursed through an expense claim cannot be claimed again in your tax return.
A good approach is to prepare a list of expenses by category, then ask three questions for each one:
1. Did I pay for it myself?
2. Was it connected to earning my income?
3. Can I show how I calculated the work-related portion?
If the answer to any of these is no, seek advice before claiming it.
4. Calculate working-from-home expenses using the right method
Working from home can create deductible running expenses, but only where you work from home to perform your employment duties, incur additional costs and keep appropriate records.
There are two broad ways to calculate a claim: a fixed-rate approach and an actual-cost approach. The best method depends on your circumstances, the expenses you incur and the records you have maintained. A fixed-rate method can simplify the calculation of certain running costs, while an actual-cost calculation may suit someone with detailed evidence and significant work-related usage.
Be careful not to double claim. If you use a fixed-rate method that covers particular running expenses, you generally cannot claim those same expenses again separately. Some other costs, such as the work-related decline in value of equipment, may need to be considered separately.
For employees, costs such as rent, home loan interest and home insurance are generally private and are not automatically deductible simply because you work from home. A dedicated room alone does not transform household expenses into work deductions.
5. Keep a proper record of eligible car travel
Car expenses are another area where people commonly overclaim. Travel between home and a regular workplace is ordinarily private travel, even if you do some work before leaving home or take work-related calls in the car.
However, some work trips may be deductible, such as travel between separate workplaces, travel to visit clients or travel from your usual workplace to another work location. Eligibility depends on the purpose of the trip and your employment circumstances.
If you use your own car for deductible work travel, keep a contemporaneous record. Depending on the calculation method you use, this may include:
– a logbook
– odometer readings
– travel diary entries
– records of work kilometres
– fuel, registration, insurance, servicing and repair records.
Do not rely on a rough estimate prepared at tax time. A short note made when the trip occurs is more credible and far easier to maintain.
Use superannuation and giving thoughtfully
6. Consider whether a personal super contribution is appropriate
A personal contribution to superannuation may be deductible where the eligibility rules are met. This can be relevant for employees, sole traders and people who receive income from several sources.
However, making a contribution is only the first step. To claim a deduction, you generally need to give your super fund a valid notice of intent to claim a deduction and receive the fund’s written acknowledgement before claiming it in your tax return. Timing matters, particularly if you are close to lodging your return, changing funds, withdrawing benefits or starting an income stream.
A personal deductible contribution counts towards the applicable concessional contributions cap. Other issues can also arise, including employer contributions, salary sacrifice arrangements, carry-forward contribution rules, income levels and the impact on other superannuation strategies.
For this reason, super contributions should be considered as part of a broader plan, not just as a last-minute deduction.
7. Check donations before claiming them
Genuine charitable giving can be tax deductible, but not every payment to a worthy cause qualifies. The recipient must have deductible gift recipient status, and the payment must meet the applicable rules for a deductible gift or contribution.
Keep the receipt or other supporting evidence, and check whether you received a material benefit in return. Raffle tickets, auction purchases, merchandise and event attendance can have different tax treatment because you may have received something of value for your payment.
If you make regular donations through workplace giving, payroll deductions or online platforms, review your records carefully. This can prevent missed deductions, while also avoiding double claims for amounts already reflected elsewhere.
Get investments and property records right
8. Separate deductible investment costs from private costs
Investments can create deductible expenses, but deductions must relate to earning assessable income. For example, interest on money borrowed to acquire an income-producing investment may be deductible to the extent the borrowing is used for that purpose.
Problems arise when loans, accounts or assets are used for both investment and private purposes. If you redraw from an investment loan to fund personal spending, such as a holiday, vehicle or home renovation, interest may need to be apportioned. The fact that a loan is secured against an investment property does not determine the tax outcome. The use of the borrowed funds matters.
Rental property owners should also distinguish between repairs, improvements and initial repairs. A repair may be deductible in the appropriate circumstances, whereas a renovation, improvement or work that remedies a defect existing when the property was acquired may be capital in nature and dealt with differently.
If a rental property is used privately, rented below market value to family or friends, or not genuinely available for rent, deductions may need to be reduced or may not be available for the relevant period.
9. Plan ahead for capital gains tax, rather than reacting after a sale
Capital gains tax is often triggered when you dispose of an asset, including shares, investment property and crypto assets. The tax outcome is usually determined by records kept from the day you acquire the asset, not just the paperwork available when you sell it.
Maintain records of:
– purchase and sale contracts
– settlement statements
– brokerage and transaction costs
– legal, valuation and agent costs
– capital improvements
– periods of private, income-producing or business use
– earlier capital losses carried forward
– records of deductions already claimed that may affect the asset’s cost base.
A capital loss can generally be used only against capital gains, not against salary or ordinary business income. It may be carried forward where the rules allow, so reporting it correctly can be valuable even if you have no capital gain in the same year.
Before selling a significant asset, obtain advice early. Timing, ownership, use of the asset and available concessions can all affect the result.
Build tax habits into your business operations
10. Review your business position before EOFY, not after it
For sole traders and small business owners, tax savings often come from accurate bookkeeping and timely decisions throughout the year. Waiting until the return is due can mean missed records, rushed classifications and avoidable errors.
Before EOFY, review:
– outstanding customer invoices and business income
– unpaid supplier bills and recurring expenses
– asset purchases and whether they are used or installed ready for use
– stock on hand and private use of trading stock
– bad debts and whether they have genuinely become unrecoverable
– superannuation obligations and payment timing
– GST coding and BAS reconciliations
– private use of business vehicles, equipment, phones and home office costs
– drawings from the business and payments to owners or related parties.
For eligible small businesses, depreciation concessions may allow an immediate deduction for qualifying assets, while other assets may need to be depreciated over time. Eligibility depends on the business structure, turnover, the applicable rules for the relevant income year, when the asset was first used or installed ready for use, and whether it has any private use.
A generic example illustrates why this matters. A sole trader buys a laptop primarily for client work but also uses it at home for personal tasks. Rather than claiming the full purchase price automatically, they retain the invoice, document a reasonable business-use percentage and consider whether the relevant depreciation rules allow an immediate deduction or require the cost to be claimed over time. That approach is more likely to produce a correct and supportable outcome.
The cost of managing your tax affairs, including eligible tax agent and accounting fees, may also be deductible. Good advice can therefore help you make informed decisions while improving the quality of your records and reporting.
The key takeaway
Maximising your refund is not about finding a single “magic” deduction. It is about consistent habits: recording income properly, claiming only what you are entitled to claim, separating private and business costs, and planning important decisions before the end of the financial year.
Tax rules are highly dependent on your income, work arrangements, investments, business structure and records. This article is general information only and is not personal financial or tax advice. Speak with a registered tax agent or accountant, such as, about advice tailored to your circumstances.