How to Maximise Your Tax Return in Australia: 2025 Guide

Tax time in Australia can feel like a high-stakes game. Do you rush in on July 1st, or do you wait? Are you claiming every last dollar you’re entitled to, or is fear of an audit causing you to leave money on the table? Getting the most back on your tax return isn’t about finding loopholes; it’s about understanding the system and making it work for you. The goal is simple: legally lower the amount of income the Australian Taxation Office (ATO) can tax.

The best way to do this is by diligently claiming every single deduction you’re entitled to, making the most of available tax offsets, and keeping good records all year long to back it all up. Unfortunately, many Australians make common mistakes like underclaiming deductions or losing receipts, which means they’re missing out on their biggest possible refund. This guide will walk you through the key strategies to help you confidently and legally maximise your tax return.

Understand What You Can Claim

This is where most Aussies find the biggest opportunities to boost their tax refund. To really get the most back, you have to look beyond the obvious. It’s about understanding the finer points of what the Australian Taxation Office (ATO) allows.

Let’s be clear on the fundamentals first. Any deduction you claim must meet three golden rules: you spent your own money and weren’t reimbursed, the expense was directly related to earning your income, and you have records to prove it.

Work-related expenses

Think about what you have to spend money on simply to do your job. These are your work-related expenses.

• Tools and Equipment: If you buy tools or equipment for work, you can claim an immediate deduction for anything that costs $300 or less. For items over that amount, you claim the depreciation (or decline in value) over several years.
• Uniforms and Protective Clothing: You can claim the cost of buying, hiring, or repairing clothing that is specific to your employer, like a shirt with a company logo. This also covers essential protective gear like steel-capped boots, sun hats, or high-vis vests.
• Self-Education Expenses: If you took a course or did some training that is directly related to improving the skills you need for your current job, you can claim those costs. This includes the course fees, textbooks, and stationery.

Home office expenses

With so many of us working from home, this deduction has become a major one. It’s also an area the ATO scrutinises closely, so knowing your options is key to claiming confidently and correctly. You have two main methods:

• Fixed Rate Method: This is the simple option. As of the 2024-25 financial year, the ATO lets you claim a flat rate of 70 cents for every hour you work from home. This is a handy shortcut covering your electricity, gas, internet, and phone usage. You just need a record of your hours, like a diary or timesheet.
• Actual Cost Method: This is more hands-on but can lead to a much larger deduction. Here, you calculate the work-related portion of all your individual home office costs—think heating, cooling, lighting, internet, phone, and even the depreciation of your desk and chair. This requires meticulous record-keeping.

Car and travel expenses

If you use your personal car for work-related trips (which doesn’t include the daily commute to the office), you can claim the running costs. Again, the ATO gives you two methods:

• Cents Per Kilometre Method: The no-fuss option. You can claim a set rate per kilometre for up to 5,000 business kilometres per car, each year. You don’t need every fuel receipt, but you do need to show how you calculated your kilometres, usually with a diary.
• Logbook Method: This takes more work upfront but can be far more rewarding. You’ll need to keep a detailed logbook for 12 continuous weeks to work out the business-use percentage of your car. Once you have that percentage, you can claim it against all your car’s running costs—fuel, insurance, rego, servicing, and even depreciation. That 12-week logbook is then valid for five years!

Internet and phone bills

If you use your personal phone or internet for work, you can claim a portion of the cost. You’ll need to keep a record for a representative four-week period to determine your work-related usage percentage. For example, if your phone bill is $100 a month and you determine your usage is 50% work-related, you can claim $50 each month.

Donations to registered charities

If you’ve donated $2 or more to a Deductible Gift Recipient (DGR), which most registered charities are, you can claim the full amount of the donation. Just make sure you have the receipt from the charity.

Organise Your Records & Receipts

A big tax refund is the direct result of good habits throughout the financial year. The biggest difference between an average refund and a fantastic one often boils down to organisation. A lost or faded receipt for a $250 tool could cost you $82.50 in your refund if you’re in the 33% tax bracket.

Ditch the shoebox of faded receipts and adopt a better system.

• Go Digital: Always ask for an emailed receipt. They don’t fade or get lost.
• Use an App: ATO-compliant apps let you snap a photo of a receipt, and they’ll categorise it for you.
• Try a Cloud Folder: Set up a “Tax 2025” folder in Google Drive or Dropbox with subfolders for different expense types (“Home Office,” “Car,” etc.). Snap a photo of your receipt right after you buy something and save it to the correct folder.

Know the ATO Benchmarks and Red Flags

Being organised isn’t just about finding more deductions; it’s also about keeping yourself off the ATO’s radar. The ATO uses sophisticated data-matching to compare your claims against others in your industry and income bracket. These are known as ATO benchmarks.

If your claims for work-related expenses are significantly higher than the average for someone with your job and income, it can raise a red flag. This is why guessing amounts is so dangerous and can easily trigger a review or audit. Your meticulously kept records are your best defence, proving your claims are legitimate and based on what you actually spent, not what you think the ATO will accept. Avoid overclaiming or guessing to stay out of trouble.

Super Contributions

A great tax return isn’t just about claiming what you spent. It’s also about making smart financial moves. Boosting your superannuation is a classic two-for-one. You build a bigger nest egg for retirement while shrinking your taxable income right now.

Claiming personal super contributions

You can make personal, concessional (before-tax) contributions to your super up to the annual cap ($30,000 for the 2024-25 financial year). These contributions are only taxed at 15% inside your super fund, which for most people is much lower than their marginal tax rate. Before making a contribution, you must lodge a ‘Notice of intent to claim’ form with your super fund and get their acknowledgement back to secure the deduction.

Using carry-forward contributions

This fantastic rule allows you to use any of your unused concessional contribution caps from the last five financial years. To qualify, your total super balance needed to be under $500,000 at the end of the last financial year. This is a game-changer if you’ve had a higher income year and want to make a larger-than-usual contribution to offset a bigger tax bill. You can explore more details on government finance statistics from the Australian Bureau of Statistics.

Offset Opportunities

It’s easy to get deductions and offsets confused. A deduction reduces your taxable income. An offset is even better—it’s a dollar-for-dollar discount on the tax you actually owe.

• Low and Middle-Income Tax Offset (LMITO): This offset ended on 30 June 2022, but the government has introduced new cost-of-living tax cuts from 1 July 2024. It’s a good reminder that policies change, so it always pays to check what’s current.
• Seniors and Pensioners Tax Offset (SAPTO): A valuable offset for eligible seniors and pensioners that helps reduce their tax bill. The ATO works this out automatically if you meet specific age and income conditions.
• Spouse Super Contributions Offset: This is a brilliant and often overlooked strategy. If you make a super contribution for your low-income spouse (who earns less than $40,000 a year), you can claim a tax offset of up to $540.

Use a Registered Tax Agent

If you’re serious about maximising your tax return, one of the smartest moves you can make is to work with a registered tax agent. Their expertise means they can spot legitimate deductions and offsets that the average person might miss. An agent’s real value is asking the right questions to understand your unique situation, giving you the confidence to claim everything you’re entitled to without straying into risky territory.

The best part? The fee you pay your tax agent is fully tax-deductible in the next financial year. At Nanak Accountants & Associates, we specialise in finding every legal deduction to make sure you get the best possible outcome.

Lodge at the Right Time

In the rush to get their refund, many people make the critical mistake of lodging their return on the 1st of July. A little patience goes a long way. The ATO’s pre-fill service automatically loads your return with information from employers, banks, and health funds, but most organisations have until mid-to-late July to provide this data.

Don’t rush. Lodging too early means you’re likely working with incomplete information, which can cause errors and delays. By waiting until at least mid-July, most of that pre-fill data will be locked in, giving you an accurate starting point and dramatically reducing your risk of making a costly mistake. Checking the official ATO lodgment statistics can show you how many people use agents and benefit from their extended deadlines.

Conclusion

Maximising your tax refund doesn’t have to be complicated. By understanding what you can claim, keeping organised records throughout the year, taking advantage of super contributions and offsets, and lodging at the right time, you can significantly increase your tax refund. The value of being organised and informed can’t be overstated. It puts you in control and ensures you keep more of your hard-earned money.

For the biggest and safest refund, especially if your financial situation has any complexity, it’s always wise to seek professional guidance. An expert can ensure you’re not leaving any money on the table.

Feeling confident about your tax return is one thing, but having an expert in your corner ensures you get the absolute best outcome possible. The team at Nanak Accountants & Associates has over 30 years of experience helping Australians legally maximise their tax refunds. Don’t leave money on the table—let us help you find every deduction and offset you’re entitled to.