Tax time is around the corner, and one of the most common questions we hear at Supertax is:

“What tax deductions can I claim?”

The right deductions can significantly reduce your taxable income and help you legally pay less tax. But it’s not just about claiming — it’s about claiming correctly. The ATO is cracking down on incorrect or inflated deductions, so it’s essential to know what’s allowed, what’s not, and how to keep proper records.

Here’s your updated 2025 guide to tax deductions in Australia — for both individuals and business owners.

💼 1. Tax Deductions for Individuals

If you’re a salary or wage earner, these are some of the most common deductions you may be eligible for this year.

✅ Work-Related Expenses

You may be able to claim:

• Occupation-specific clothing (e.g. hi-vis, chef uniforms)
• Compulsory uniforms with logos
• Protective gear and tools
• Laundry costs for eligible uniforms

🧾 Tip: Keep receipts and a laundry diary if claiming washing expenses.

✅ Union Fees & Memberships

Union dues and memberships for professional associations are deductible — provided they directly relate to your employment.

If your employer deducts union fees from your pay, these should be pre-filled in your ATO data — but double-check them!

✅ Home Office Deductions

If you work from home, you can claim:

• 67c/hour fixed-rate method (covers power, phone, internet, stationery)
• Actual expenses method, if you have full receipts and usage records

📌 Important: You must have a record of the actual hours worked — no estimates allowed under ATO 2025 rules.

✅ Self-Education Expenses

You can claim education costs if the course:

• Relates directly to your current job and helps maintain or improve your skills

❌ You cannot claim if the study is to start a new career.

✅ Vehicle & Travel Deductions

• Only claim travel if it’s work-required (not your usual commute)
• Use a logbook or cents per km method
• Keep detailed records of kilometres, fuel, tolls, and parking

If you receive a travel/car allowance from work, it’s taxable — but you can still claim the actual expense.

✅ Donations

Only donations to Deductible Gift Recipients (DGRs) are claimable. Check their status via the ACNC register.

✅ Tax Agent Fees

You can deduct any tax agent or accountant fees paid last year in your current return.

✅ Income Protection Insurance

Only the income protection component of your policy is deductible (not life or TPD insurance).

✅ Rental Property Deductions

If you own an investment property, you can claim:

• Interest on loans
• Property management fees
• Repairs (not improvements or renovations)
• Council rates, land tax, water, insurance
• Depreciation on eligible assets

✅ Phone & Internet Use

If part of your usage is work-related, you can claim a proportional deduction — but keep records!

🧾 2. Business Tax Deductions (Sole Traders, Companies & Trusts)

Running a business? Here’s what you may be able to claim in 2025.

✅ Home Office Expenses

If your home is your principal place of business (not just working from home occasionally), a percentage of costs like rent, power, and internet may be deductible.

✅ Business Equipment

• Laptops, monitors, phones, and software
• Items under $20,000 may qualify for instant asset write-off
• Larger purchases may need to be depreciated

✅ Professional Services

Accounting, legal, tax, and CFO services are deductible.

📝 Note: Business coaching must relate directly to business performance, not personal development.

✅ Business Travel

Only the business portion of travel is deductible.

Keep all receipts and a travel diary for trips longer than 6 nights.

✅ Training & Education

Education to maintain skills or improve business operations can be claimed — as long as it links directly to your current income-earning activities.

✅ Vehicle Expenses

Claim the business-use percentage of your car.

Keep a valid 12-week logbook to calculate deductions correctly.

⚠️ If your business car is available for private use, you may trigger Fringe Benefits Tax (FBT).

✅ Business Insurance

Policies like public liability, professional indemnity, and cyber insurance are fully deductible.

✅ Superannuation Contributions

Contributions for employees and yourself (if self-employed) are deductible, but only when paid before 30 June 2025.

🚨 Late-paid super is not deductible and may attract penalties.

✅ Interest on Business Loans

Deduct interest only on the business-use portion of loans — don’t mix personal use with business borrowing.

❌ Entertainment Expenses – Often NOT Deductible

The ATO does not allow deductions for most entertainment expenses, including:

• Client dinners
• Staff social events and parties
• Sporting events or concerts

🚫 Just because it’s a business discussion over lunch doesn’t make it deductible.

🧾 Always check before claiming. This is one of the most misclaimed areas for small businesses.

⚠️ 3. Common Mistakes to Avoid

❌ Claiming private expenses (e.g. Netflix, home renovations) as business deductions
❌ Overclaiming home office without a logbook
❌ Forgetting to apportion expenses correctly (e.g. mobile use)
❌ Assuming reimbursements can still be claimed
❌ Failing to plan before 30 June

📁 4. Record Keeping Requirements

You must keep records for at least 5 years after lodgement:

• Receipts, invoices, bank statements
• Logbooks and home office records
• Written evidence linking the expense to income generation
• Education course enrolments and completion statements

💡 Use the ATO myDeductions App or accounting software to help track expenses throughout the year.

📅 5. Get Tax Advice Before 30 June

The best way to maximise your deductions and stay compliant is to plan before the financial year ends.

Supertax is now helping clients with tax planning reviews for 2025 — don’t leave it until it’s too late to make smart financial decisions.

💬 Need Help Maximising Your Tax Deductions?

Whether you’re a sole trader, business owner, or PAYG employee, SuperTax can help you get your deductions right and reduce your tax legally.

📍 Visit us online: www.mysupertax.com.au
📧 Email: info@mysupertax.com.au
📞 Call: (03) 7074 8818