Tax time is not just about lodging a return. It is an opportunity to make sure you are claiming every deduction you are legally entitled to, avoid common mistakes, and start the new financial year with confidence. A little preparation now makes the whole process smoother and can help ensure you do not pay more tax than necessary. Here is a plain English guide to preparing your 2025/26 Australian tax return.
First, a quick word on timing
Your income statement from your employer is usually finalised by mid July, and the ATO prefills most bank interest, dividend, and health fund details over the following weeks. Lodging too early can mean missing data and an amended return later, so we generally suggest waiting until your prefill information is complete.
If you lodge your own return, the deadline is 31 October 2026. If you lodge through a registered tax agent like Arithma Accountants, you may have access to extended lodgment dates, in some cases as late as May 2027, provided you engage us before 31 October 2026 and are eligible for the ATO's tax agent lodgment program.
The ATO knows more than ever
The ATO now receives information directly from employers, banks, share registries, investment platforms, cryptocurrency exchanges, health funds, and many other organisations. This means omissions or incorrect claims are far more likely to be detected than they were even a few years ago.
It is worth taking a little extra care to make sure your return is complete and accurate before lodging. An accurate return means fewer delays and reduces the likelihood of ATO queries or amendments.
Common Tax Deductions You May Be Able to Claim
The golden rule has not changed: you can claim a deduction for expenses you actually incurred in earning your income, that were not reimbursed, and that you can substantiate. Here are the areas we see most often.
Working from home. If you work from home regularly, you can claim 70 cents for every hour worked under the fixed rate method, which covers electricity, internet, phone, and stationery. You will need a record of your actual hours, such as a diary or timesheet. Alternatively, the actual cost method may result in a larger deduction if you keep detailed records.
Car and travel. Work related car travel, such as driving between job sites or to client meetings, can be claimed at 88 cents per kilometre for up to 5,000 kilometres, or through a logbook if your work travel is substantial. Only work related travel is deductible, and the daily commute from home to your regular workplace does not qualify.
Tools, equipment, and technology. Items costing $300 or less can generally be claimed in full straight away. More expensive items, such as a laptop, are claimed over their effective life. If an item is used partly for personal purposes, only the work portion is deductible.
Self education. Courses, seminars, and subscriptions that maintain or improve the skills you use in your current role are generally deductible. Study aimed at moving into a completely new career is not.
Donations. Gifts of $2 or more to registered deductible gift recipients can be claimed, so gather those receipts.
A note for employees
If your employer reimbursed you for an expense, you generally cannot claim it as a tax deduction. Similarly, clothing is only deductible in limited circumstances, such as compulsory uniforms, protective clothing, or occupation specific clothing. Ordinary work attire, even if you only wear it to work, does not qualify. These are two of the most frequent errors we see individual taxpayers make.
If you own an investment property
Rental properties deserve their own mention because they are one of the areas where deductions are most often missed or mishandled. Interest on your investment loan, council rates, insurance, property management fees, and repairs can all form part of your claim, along with borrowing costs such as loan establishment fees, which are typically claimed over five years.
Depreciation is one of the most commonly overlooked deductions for investment property owners. A quality depreciation schedule prepared by a quantity surveyor captures both the decline in value of fixtures and fittings and the capital works deduction on the building itself, and it often pays for itself many times over. One distinction that matters: a repair restores something to its original condition and is deductible now, while an improvement makes something better than it was and is claimed gradually over time. Be aware too that initial repairs to fix defects that existed when you purchased the property are generally not immediately deductible. Getting these distinctions right can make a meaningful difference to your return.
If you sold shares, ETFs, or crypto
If you sold shares, ETFs, or cryptocurrency during the year, there may be capital gains or losses to report, even if you reinvested the proceeds. The ATO receives information directly from share registries, investment platforms, and many cryptocurrency exchanges, so these transactions should never be left off a return. If you held an asset for more than twelve months, individuals and trusts are generally entitled to a 50 per cent capital gains tax discount, subject to the tax rules, and capital losses can be carried forward to offset future gains.
If you run a business
Before lodging, make sure your bookkeeping is up to date, business and private expenses are correctly separated, superannuation obligations have been met, and any new equipment or vehicles purchased during the year have been correctly recorded. Good bookkeeping throughout the year usually results in a smoother and more accurate tax return and often uncovers deductions that might otherwise be missed.
Superannuation and private health reminders
The Superannuation Guarantee rate was 12 per cent throughout the 2025/26 year, so it is worth checking your payslips to confirm your employer contributions were correct. If you made personal deductible contributions during the year, remember that you must lodge a notice of intent with your fund and receive their acknowledgment before you can claim the deduction.
Also check that your private health insurance details are correct before lodging. Incorrect information can affect your Private Health Insurance Rebate or Medicare Levy Surcharge calculation and may delay your assessment.
Common mistakes we see every year
A few errors come across our desks every single tax season. The most frequent are claiming the daily trip from home to work, forgetting bank interest or dividend income, claiming ordinary clothing that is not deductible, leaving out investment income, including overseas income and foreign investments, claiming expenses that were reimbursed by an employer, and lodging before the ATO's prefill data is finalised. None of these are dramatic on their own, but each one can trigger questions, delays, or an amended assessment.
Keep your records
The ATO expects you to hold receipts and records for five years. A simple folder on your phone or computer where you save receipts as you go will save you hours next tax time. Where possible, keep digital copies of your receipts, as paper receipts often fade over time.
Tax Time Checklist
✔ Wait until your income statement is finalised
✔ Gather receipts and records
✔ Check your investment income
✔ Review work related deductions
✔ Confirm super contributions
✔ Check your private health insurance details
✔ Lodge when your ATO prefill data is complete
Ready to lodge?
Whether your tax affairs are straightforward or involve investments, rental properties, or a small business, we aim to make the process simple, explain everything in plain English, and ensure your return is accurate and that you claim every deduction you are legally entitled to.
Getting started takes just a few minutes with our online onboarding form, and from there we handle the rest.
Start here: Tax Return Onboarding
Or reach out directly on 1300 082 558 or at info@arithma.com.au. We have offices in Sydney and Brisbane and work with clients right across Australia.
Every tax return is different. A small deduction missed today may seem insignificant, but over several years the amounts add up. Taking a little extra time to prepare properly usually results in a more accurate return, a better outcome, and fewer questions from the ATO.
If you would like professional help preparing your 2025/26 Australian tax return, we would be pleased to help. Contact Arithma Accountants today to get started, or explore more tax and business insights in our latest articles.
This article is general information only and does not take your personal circumstances into account. Please speak with us before acting on anything you have read here. Arithma Accountants does not hold an Australian Financial Services Licence and does not provide financial product advice.