As we approach the end of the 2025 financial year, now is the time to be proactive with tax planning, especially with a federal election around the corner and potential future policy changes ahead.
Here’s a comprehensive checklist of what to consider before 30 June 2025:
Maximise Deductions Early
The ATO is focusing heavily on deductions this year.
Make sure any deductible expenses — such as repairs, maintenance, consumables, subscriptions, or software — are paid before 30 June so you can claim them in this financial year.
You can also prepay up to 12 months of some expenses (like rent, insurance, or loan interest) and claim the deduction now, if it suits your cash flow.
Tip: You may also be able to claim a portion of your phone, internet, home office setup, and even motor vehicle use if it relates to business activity.
Superannuation Contributions
For employees, sole traders, and business owners:
The concessional (deductible) contribution cap this year is $30,000.
If your super balance is under $500,000, you may also be eligible to make catch-up contributions using unused cap amounts from previous years.
Contributions must be received by your fund (not just paid) before 30 June to be deductible.
Tip: If you are a sole trader or side-hustler without compulsory super obligations, making personal contributions can still reduce your taxable income.
Review Your Business or Investment Structure
In uncertain times, reviewing your structure is important:
- Are you still operating under the most tax-effective structure (sole trader, partnership, company, trust)?
- Are you personally exposed to risks that could be better managed through a different structure?
- Is your structure optimised for future growth, investment, or succession planning?
Tip: If your side-hustle is growing, you might need to think about transitioning from a sole trader to a company or trust for asset protection and tax efficiency.
Assets and Depreciation
Temporary Full Expensing (TFE) has ended, meaning normal depreciation rules now apply.
If you purchase eligible business assets (such as computers, tools, or equipment), you may need to depreciate them over time unless they qualify for immediate deduction under existing small business rules.
Tip: Only purchase assets that are genuinely needed for the business! — buying for tax reasons alone is rarely beneficial.
Trust Resolutions
If you operate through a trust, trustee distribution resolutions must be signed by 30 June.
Failing to complete this properly can result in income being taxed at the top marginal rate. Freshwater Trust clients, we will soon be in touch to ensure yours are arranged along with tax planning as required.
Manage Capital Gains and Losses
If you have sold shares, property, crypto, or other investments this year:
- Review realised gains and losses.
- Consider whether realising a capital loss to offset gains would be beneficial.
- Remember the 12-month ownership rule for the 50% CGT discount.
Tip: Timing matters — seek advice before selling major assets close to the end of financial year.
Division 7A Loans (for Company Directors)
If you have borrowed funds from your company:
- Minimum yearly repayments must be made before 30 June.
- Ensure any required Division 7A loan agreements are in place and up to date.
Rental Property Owners
Rental property owners should:
- Bring forward maintenance, repairs, and other deductible expenses if appropriate.
- Ensure proper records are kept for all costs including interest, insurance, rates, agent fees, and repairs.
- Understand the difference between repairs (immediately deductible) and improvements (capitalised and depreciated).
- Review eligibility for depreciation deductions on assets and capital works.
- Be mindful that extended vacancy periods may attract ATO scrutiny over deductions.
Tip: Accurate record-keeping and professional advice are key to maximising deductions without triggering red flags.
Record Keeping and Audit Risk
Regardless of whether you are a sole trader, small business owner, side-hustler, or investor:
- Maintain detailed, accurate records including invoices, receipts, bank statements, and expense logs!
The ATO is using increasingly sophisticated data-matching tools and audit activity is expected to rise. Incomplete or inconsistent records heighten your risk of audit and penalties.
Final Thoughts
The end of the financial year is always a critical time, but with the current level of political and economic uncertainty, careful planning is more important than ever.
If you would like tailored advice for your situation — whether it’s business, investment, rental, or personal — please get in touch early. Acting now means we have more opportunities to optimise your position before 30 June.
