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Most taxpayers miss out on deductions because they forget expenses, use outdated rates, lose receipts, misunderstand private use, or lodge before all income information is available.
A better approach is to make accurate claims, support every deduction, and avoid the kinds of claims the ATO is likely to scrutinise.
This guide walks you through maximising your tax refund without overclaiming and risking penalties.
- Claim only what you are legally entitled to, and keep records that support each deduction.
- Report all income first, including side income, investments, and government payments.
- Use the current 2025–26 rates for working-from-home and car claims.
- Make sure that any private use is excluded or apportioned.
- Overclaiming can delay your refund or attract an ATO review.
Contents
- What does it actually mean to maximise your tax refund?
- Check you have declared all income before chasing deductions
- Claim work-related deductions correctly
- Be careful with deductions the ATO may scrutinise
- What about the proposed $1,000 instant tax deduction?
- EOFY tax refund checklist
- Should you use a tax agent?
- FAQs
What does it actually mean to maximise your tax refund?
Maximising your tax refund means reducing your taxable income and claiming eligible offsets without overclaiming or leaving out income.
A refund is based on tax withheld, taxable income, deductions, offsets and levies, so a deduction reduces taxable income while an offset directly reduces tax payable. Neither should be confused with a cash reimbursement.
Remember that you still need to declare all income, including side income and investment income, before you can apply for a refund.
Check you have declared all income before chasing deductions
Before looking at what deductions you can apply to your taxes, make sure every income source is included in your return. Here are some common income sources people forget:
- Bank interest
- Dividends
- Rental income
- Side hustle or freelance income
- Foreign income
- Government payments
- Cryptocurrency gains or losses
- Capital gains from shares or other assets
Failing to report income can delay a refund or trigger an ATO review.
Claim work-related deductions correctly
There are many different types of deductions you can claim. However, all work-related deductions need to satisfy three general rules:
- The expense must be directly related to earning income.
- You must have paid for it and not been reimbursed.
- You must have a record to prove it.
You can’t claim private expenses just because they helped you be available at work or similar.
Common legitimate examples of deductions include:
- Uniforms and protective clothing
- Tools and equipment
- Union fees and professional memberships
- Subscriptions
- Self-education linked to current work
- Work-related travel
- Home office expenses
- Phone and internet expenses
- Car expenses
Let’s take a closer look at some of these deductions in the following sections.
Working from home deductions for 2025–26
If you work from home, you can claim certain related expenses. To do so, you can generally choose between the fixed-rate method and the actual-cost method.
For 2025–26, the fixed-rate method is 70 cents per hour worked from home. It covers:
- Electricity and gas
- Home and mobile internet
- Mobile and home phone usage
- Stationery
- Computer consumables
Where eligible, you can also claim the decline in value for depreciating assets as well as their maintenance. This includes items such as office furniture and technology.
To claim work-from-home expenses, you’ll need to provide records of hours worked from home. You’ll also need evidence for any additional claims, such as a decline in equipment value.
Car expense deductions for 2025–26
If you use your car for work, you may be able to claim certain related expenses. Notably, home-to-work travel is usually private travel and not claimable. However, you can expense travel to work sites or client meetings.
The two methods to claim car expenses are the cents-per-kilometre method and the logbook method.
For 2025–26, the cents-per-kilometre rate is 88 cents per kilometre, up to a maximum of 5,000 business kilometres per car. This rate covers running costs such as fuel, servicing, registration, insurance, and depreciation.
You don’t need written evidence for every car expense under this method, but you still need to show how you worked out your business kilometres.
Alternatively, you can use the logbook method, which doesn’t have a cap. As such, it’s best suited for high business-use vehicles, frequent work-related travel, sole traders or mobile workers, and people with strong records of actual expenses.
Remember that no matter which method you use, you need to apportion your expenses if any personal travel is involved.
Use super contributions carefully
Personal super contributions may be tax-deductible under certain conditions. To ensure eligibility, you must:
- Make an eligible personal contribution.
- Stay within the concessional contributions cap.
- Submit a valid notice of intent to claim.
- Receive acknowledgment from your super fund.
- Claim the deduction on your tax return.
For 2025–26, the concessional contributions cap is $30,000. Concessional contributions include employer super guarantee contributions, salary sacrifice contributions, and personal deductible contributions.
That cap applies across all concessional amounts, not just to extra personal contributions.
Claim tools, equipment and technology properly
Take care when claiming tools, equipment, and technology. Depending on the cost of the time, you may be able to claim an instant asset tax write-off (if under $20,000 per asset). For higher cost items, you can depreciate the claims over time.
Keep in mind that employees and sole traders may face different treatment depending on the asset and its use.
Common examples of tools and equipment you can claim include:
- Laptops
- Monitors
- Keyboards
- Office chairs
- Software subscriptions
- Tools
- Protective equipment
Remember always to apportion private use. For example, if you buy a laptop used 70% for work and 30% for personal use, only the work-related portion can generally be claimed.
Do not forget occupation-specific deductions
Deduction opportunities vary by occupation, so it is worth checking which apply to your work.
Here is a quick summary of possible deductions:
| Occupation | Possible Deductions |
|---|---|
| Teachers | Classroom resources |
| Nurses and healthcare workers | Uniforms or professional registration |
| Tradies | Tools and protective equipment |
| Office workers | Home office costs |
| Freelancers and sole traders | Business expenses |
| Creatives | Software or equipment related to earning income |
The key test is still whether the expense is connected to producing your income.
Check deductions that are often missed
Deductions are a key way to reduce your tax burden. Here is a quick list of deductions people often overlook:
- Union fees
- Professional memberships
- Tax agent fees from the previous year
- Income protection insurance held outside super
- Work-related phone and internet use
- Self-education linked to current employment
- Donations to deductible gift recipients
- Professional subscriptions
- Home office equipment depreciation
- Bank fees on investment accounts
- Investment advice related to existing income-producing investments
Check if any may apply to you. These aren’t automatic claims, but it’s worth reviewing whether you can deduct them from your overall tax bill.
Be careful with deductions the ATO may scrutinise
The following deduction categories attract closer attention from the ATO:
- Working from home expenses
- Car expenses
- Laundry and clothing
- Self-education
- Travel
- Meals
- Phone and internet
- Side hustle expenses
- Rental property claims
The safest approach is to claim only the work-related portion and keep clear evidence of your calculations.
What about the proposed $1,000 instant tax deduction?
The proposed $1,000 instant tax deduction aims to simplify the process of claiming work-related deductions. However, it has not yet been enacted into law; it’s slated to take effect in the 2026–27 tax year.
Until that happens, taxpayers still need to use the normal substantiation and deduction rules.
EOFY tax refund checklist
- Wait for income statements to be marked tax-ready.
- Check bank interest, dividends and investment income.
- Gather receipts for work-related expenses.
- Confirm working from home hours.
- Check car kilometres or logbook records.
- Review phone and internet use.
- Check super contributions and notice of intent paperwork.
- Review private health insurance details.
- Check tax agent fees from the previous year.
- Review donations to deductible gift recipients.
- Keep records for at least the required period.
- Speak to a registered tax agent if unsure.
Should you use a tax agent?
While some tax returns are simple, you might benefit from hiring a tax agent if:
- You have multiple income sources.
- You work from home regularly.
- You use your car for work purposes.
- You have a side hustle or freelance income.
- You have made personal super contributions.
- You have investment, rental, or crypto income.
- You are unsure about the required record-keeping.
- You want to reduce the risk of overclaiming.
A tax agent can help you apply current rules correctly and make sure that every deduction you claim is truly eligible.
Lawpath can help you stay compliant with the latest laws while maximising eligible tax refund strategies. Reach out today!
FAQs
How can I maximise my tax refund in Australia?
You can make sure you get the most out of your tax refund by declaring all income, claiming every eligible deduction and offset, using the current rates, and keeping records that support each claim. The goal is to legally reduce taxable income, not to guess or inflate expenses.
What is the working from home rate for 2025–26?
The fixed rate method is 70 cents per hour worked from home.
What is the cents-per-kilometre rate for 2025–26?
The cents-per-kilometre rate is 88 cents per kilometre, up to 5,000 business kilometres per car.
Does a tax deduction increase my refund by the full amount?
No. A deduction reduces taxable income, so the benefit depends on your tax rate and overall return position.
Can I claim personal super contributions?
Usually, yes. You need to make sure the contribution is eligible, that you stay within the concessional cap, that your fund provides a valid notice of intent, that the fund acknowledges it, and that you claim it correctly in your return.
Can I claim the proposed $1,000 instant tax deduction?
Not at the time of writing this article, and the legislation hasn’t yet passed. Until then, normal deduction rules still apply.
What records do I need for my tax return?
Keep income records, receipts, logs or diaries for work-related use, super paperwork, and any documents that show how you calculated apportionment or business use.
