ATO Tax Time 2025: What’s New for Individual Taxpayers
Now that it is Tax Time 2025, the Australian Taxation Office (ATO) has introduced several updates that may impact how individuals prepare and lodge their tax returns. Whether you are a salaried employee, a sole trader, or managing investment income, staying informed can help you maximise deductions and avoid delays. At EMspire, we are committed to helping individuals and business owners navigate these changes with ease.
Here is a summary of the key changes to keep in mind when preparing individual tax returns for the year ended 30 June 2025:
1. Work-Related Expense Updates
Work from Home Fixed Rate: The fixed rate method has increased to 70 cents per hour. This covers electricity, internet, phone, and stationery costs. You must keep a record of hours worked from home.
Car Expenses: The cents-per-kilometre rate has risen to 88 cents per kilometre for work-related car travel.
2. Electric Vehicle Charging Deductions
A new EV home charging rate of 4.2 cents per kilometre is available for plug-in hybrid electric vehicles (PHEVs) used for income-producing purposes. You must use the logbook method and maintain proper records.
3. Medicare Levy Exemption for Lump Sum Payments
From 1 July 2024, eligible lump sum payments in arrears will be excluded from Medicare levy calculations. This change ensures fairer treatment for those receiving back payments.
4. Property Transactions and Foreign Resident Withholding
From 1 January 2025, the foreign resident capital gains withholding rate increases to 15%, and the threshold has been removed. This applies to all property sales unless a clearance certificate is provided.
5. Tax Help Program Expansion
The income threshold for free tax help has increased to $70,000. ATO-trained volunteers can assist eligible individuals with lodging returns, amending mistakes, and more.
6. Cheque Refunds Phased Out
The ATO now has the discretion to retain refunds for up to 90 days if valid bank details are not provided. To avoid delays, ensure your financial institution details are up to date.
7. Looking Ahead: Proposed Instant Deduction
A proposed $1,000 instant tax deduction for work-related expenses is slated for 2026–27. This is not yet law and does not apply to Tax Time 2025.
More information can be found on the ATO website. (Note for Ryan hyperlink “website” to ATO What’s new for individuals | Australian Taxation Office )
Need Help Navigating These Changes?
Our team specialize in helping individuals, families and business owners make sense of their tax obligations. Whether you’re working from home, investing in property, or managing complex deductions, our experienced team is here to guide you through every step of the process.
Contact us today to book your tax consultation and ensure you’re making the most of Tax Time.
The team at EMspire Advisory are trusted, qualified Chartered Accountants, tax agents, and small business accountants. We work closely with our clients to achieve the best possible outcomes. To find out more, please contact us!
Please note that this information is not specific and is general in nature and cannot be relied on as advice. Please contact us for advice specific to you and your circumstances.