Tax Planning for 2025 – Why they matter

🧾 General Tax Strategies

1. Stage 3 Tax Cuts

• These are already legislated and apply from 1 July 2024.
• They reduce the marginal tax rate for many Australians, especially those earning between $45,000 and $135,000.
• Why it matters: You may pay less tax automatically, but it also affects how you plan deductions and income timing.

2. Work-from-Home Deductions

• You can claim 70 cents per hour for home office expenses using the fixed rate method.
• You must keep accurate records of hours worked.
• Why it matters: It’s a simple way to reduce taxable income if you work remotely.

3. Prepay Deductible Expenses

• You can prepay up to 12 months of certain expenses like:
  • Investment loan interest
  • Income protection insurance
  • Subscriptions
• Why it matters: Brings forward deductions into this financial year, reducing your current tax bill.

4. Income Protection Insurance

• If you pay premiums personally (not through super), they’re tax-deductible.
• Why it matters: Protects your income and reduces your tax.

5. Offset Capital Gains with Losses

• If you’ve made capital gains (e.g. from selling shares or property), you can sell underperforming assets to realise a capital loss.
• Why it matters: Losses can offset gains, reducing your capital gains tax.

6. Avoid the Medicare Levy Surcharge

• If your income is above:
  • $93,000 (singles)
  • $186,000 (families)
• You need eligible private health insurance to avoid the surcharge (1–1.5% of income).
• Why it matters: Saves you from paying extra tax.

7. Review Investment Structures

• Consider distributing income through a family trust or other tax-effective structures.
• Why it matters: Helps reduce overall family tax liability.