2025 Tax Time Updates

2. Work-from-Home Deductions Simplified

From 1 July 2024, the fixed-rate method for working from home claims is set at 70 cents per hour. To claim this, clients must:
– Keep a daily log of hours worked from home.
– Ensure records of related costs (utilities, internet, phone) are retained.

This replaces older shortcut methods used during COVID.

3. Interest on ATO Debts No Longer Deductible

Starting 1 July 2025, interest charged by the ATO on outstanding tax debts will not be tax-deductible. This change increases the cost of deferring tax payments, especially for small businesses and high-income individuals.

4. ATO Focus on Rental Properties

The ATO has flagged incorrect rental deductions as a key audit focus for 2025. We urge all property owners to:
– Accurately apportion expenses between personal and rental use.
– Maintain clear records for every deduction claimed.

5. Superannuation Tax on High Balances

From 1 July 2025, a new 15% tax will apply to super fund earnings on balances over $3 million, affecting high-net-worth individuals. Consider reviewing your superannuation strategy.

6. Electric Vehicle (EV) Expense Claims

You may be eligible to claim EV-related expenses. Please refer to the following summary:
Two Claim Methods:

• Cents per Kilometre Method:
  • Rate: 85 cents/km (up to 5,000 km)
  • Covers all vehicle expenses (electricity, rego, insurance, maintenance)
  • No logbook required
• Logbook Method:
  • Requires a valid 12-week logbook
  • Claim based on business-use percentage
  • Eligible expenses include electricity, insurance, rego, depreciation (capped at $69,674),
    and interest on a car loan

Home Charging Costs:

• Can only be claimed under the logbook method, not the cents/km method
• Requires charging logs, electricity rates, and business use calculation