2025 TAX PLANNING TIPS

The 30th June is fast approaching and so it’s time to consider the end of the financial year and tax considerations.  We’ve put together a list of items you may want to consider for the financial year ending 30th June 2025:

Superannuation – Individuals

Individuals can currently make personal contributions up to the concessional contribution cap of $30,000 per financial year. The concessional cap includes employer contributions. Individuals can also access the bring forward rule and use previous years caps to top up their super, so long as they meet certain criteria. If you want to claim a personal tax deduction for super contributions, then a Notice of Intent must be sent to your super fund and acknowledgement received before lodgement of your tax return. Also note that funds must be received and processed by the super fund by the 30th of June, so ideally should be paid no later than the 25th of June.

Superannuation – Business

Superannuation can be claimed in the year paid, so if you want the tax deduction for this financial year then it must be paid and received by the super funds by the 30th of June.

Superannuation Guarantee Charge (SGC) Rate

The SGC rate for employer contributions is 11.5% for the 2025 financial year.  From 1st July 2025 the SGC rate will increase to 12%.

Depreciation - Business

Under the simplified depreciation rules, small businesses with an aggregated turnover of less than $10 million are able to immediately deduct eligible assets costing less than $20,000. These eligible depreciating assets must be held and ready for use from 1st July 2024 to 30th June 2025.

For assets costing $20,000 or more, they can be allocated to the small business pool and depreciated at 15% for the first income year, and at 30% each year thereafter. If you are to utilise the small business pool, then all assets owned must be depreciated under the rules of the small business pool. 

Stock Take - Business

Doing a stock take as at 30th June can assist us in advising how your business has performed during the year and also affects your taxable income. Having a true indication of how your business is performing with a correct stock take can help with future planning.

Tax Deductions

Here are some basic guidelines for your tax deductions in the 2025 financial year.

  • Cents-per-kilometre method – If you’re using this method to claim your car expenses, the set rate for the 2025 financial year is 88 cents per kilometre, with a maximum claim of 5,000 kilometres per car, for the year. This rate covers all your work-related car expenses such as fuel, insurance, registration, depreciation, servicing and maintenance. You cannot claim these costs separately if you are using the cents-per-kilometre method.

  • Log book method – If you’re using this method to claim your car expenses you must keep a valid log book for 12 weeks.  The log book is valid for 5 years so long as your usage has not changed (e.g. change in circumstances such as travelling less for work).  You need to keep evidence of your actual fuel costs or odometer readings, which can be used to estimate your fuel cost.  You also need to keep evidence of all other expenses (i.e. receipts).

  • Car cost limit – The car limit has increased to $69,674 for the 2025 financial year. This limit indicates the maximum amount you can use in calculating the depreciation of passenger vehicles used for business/work related purposes. A passenger vehicle, for this purpose, is designed to carry a load of less than one tonne and fewer than nine passengers and excludes motorcycles or similar vehicles. If you are a GST registered business, the maximum GST credit you can claim is up to one-eleventh of the car limit ($6,334).

·      Work from home expenses

  • Fixed rate method – To claim eligible expenses you incur from operating your business at home, you can use the fixed rate method and claim at the current rate of 70 cents per hour. This rate covers work-related running expenses such as phone and internet usage, electricity and gas, stationery, and computer consumables like printer ink and paper.

  • Please note you can still claim a separate deduction for the decline in value of depreciating assets such as your laptop, printer, office desk and chair.

  • Remember to keep records of the actual hours worked during the income year and at least one record for each of the additional running expenses you incur to claim your work from home deductions under this method. Please remember that you can only claim the work-related portion of these expenses.

  • A tax deduction reduces your taxable income, but the savings received are based on your marginal tax rate.  If you are in the $45,000 to $135,000 tax bracket, each dollar you spend on a tax deduction will only save you approximately 32 cents in income tax.  Don’t spend purely for the sake of a tax deduction!

 

As always, if you have any questions about any of the above, please don't hesitate to contact our office to discuss on 08 8523 0999 (Gawler Office), 08 8299 9444 (Northgate Office) or admin@milaneseco.com.au.

Milanese & Co Accountants