As the 2025 tax season kicks off, millions of Australians are wondering how much they’ll get back from the ATO — or if they’ll face a surprise bill. With cost-of-living pressures and several policy changes rolled out this year, getting your tax refund right is more important than ever. Whether you’re a PAYG employee, gig worker, or small business owner, a strategic approach to your tax return can mean thousands of extra dollars in your pocket.
What’s New for 2025? Key Policy Updates Affecting Your Refund
The Australian tax landscape has seen some notable changes for the 2024-25 financial year. Here’s what stands out:
- Stage 3 tax cuts: The much-discussed Stage 3 tax cuts came into effect on 1 July 2024, reducing marginal tax rates for most Australians. This means many workers have already seen more take-home pay, but it could also reduce the size of your refund if you’re used to getting a big lump sum at tax time.
- Work-from-home deductions: The ATO has tightened rules on claiming home office expenses. From July 2024, you’ll need to keep more detailed records, including a daily log of hours worked from home and receipts for all expenses. The fixed rate method has increased to 70 cents per hour, but only covers electricity, internet, phone, and consumables — not depreciation of office furniture or equipment, which must be claimed separately.
- Rental property crackdown: Expect more scrutiny on rental deductions. The ATO is using data-matching technology to identify overclaimed interest, repairs, or occupancy periods for short-term rentals. Make sure your paperwork is airtight.
- Superannuation changes: The super guarantee rate rose to 11.5% in July 2024, but personal deductible contributions still offer powerful refund opportunities, especially for those with irregular income.
Strategies to Boost Your Tax Refund This Year
While the days of ‘set-and-forget’ tax returns are over, there are still smart moves you can make to increase your refund or minimise your bill:
- Claim all eligible deductions: Beyond the basics, look for overlooked work-related costs — such as union fees, professional memberships, self-education expenses, or even laundry for occupation-specific clothing. If you incurred costs due to remote work, make sure to substantiate every claim with detailed records.
- Prepay expenses: If you’re self-employed or run a side hustle, consider prepaying up to 12 months’ worth of deductible expenses (like insurance or subscriptions) before 30 June to bring forward your refund.
- Contribute to super: Making a personal super contribution and notifying your fund can yield a sizeable deduction. For example, contributing $5,000 could deliver a refund of $1,350 or more for a middle-income earner.
- Offset capital gains: Sold shares, crypto, or an investment property? Offset gains by realising capital losses elsewhere in your portfolio, or carry losses forward for future years.
- Use tax agent expertise: The average refund for Australians who use a registered tax agent is around $2,800, compared to $2,100 for self-lodgers, according to recent ATO data. Agents can spot deductions you may miss — especially if your situation is complex.
Common Traps and How to Avoid Them
ATO audits are increasingly automated and data-driven. To keep your refund (and your peace of mind), watch out for these red flags:
- Overclaiming without evidence: The most common audit trigger is claiming ‘standard’ amounts for work expenses without receipts or a clear connection to your income. The ATO expects to see itemised records and will ask for proof.
- Double-dipping deductions: Don’t claim the same expense twice (e.g., using both the fixed rate and actual cost methods for working from home). Choose the method that yields the largest legitimate deduction and stick to it.
- Incorrect rental property claims: Personal use periods, repairs versus improvements, and loan redraws for private expenses are all areas under the microscope in 2025. Keep a meticulous log and separate bank accounts if possible.
- Missing income: The ATO receives direct reports from banks, crypto exchanges, sharing economy platforms, and employers. Failing to declare all your income (including side gigs or investment earnings) is a sure way to attract attention.
Case Study: Turning a Tax Shock into a Refund Win
Consider Sarah, a Sydney-based marketing manager. In 2024, her refund dropped by $1,200 thanks to the Stage 3 tax cuts and fewer work-from-home hours. After reviewing her return with a tax agent, she:
- Identified under-claimed self-education and professional membership expenses
- Made a $3,000 personal super contribution
- Corrected a missed rental property interest deduction
Result: Sarah’s refund rebounded by $1,500. The key takeaway? Don’t leave money on the table — a proactive approach and expert review can make all the difference.
The Bottom Line
The 2025 tax season brings fresh rules and new opportunities. Whether you lodge solo or with a professional, keeping thorough records, staying across ATO updates, and understanding your entitlements are the keys to maximising your refund. With a little planning, you can turn tax time into a financial win.
