As the 2026 tax season approaches, many Australians are keen to ensure they receive the best possible refund—or at least avoid any unexpected tax bills. With recent changes to tax rates, deduction rules, and increased scrutiny from the Australian Taxation Office (ATO), it’s more important than ever to understand how these updates affect your return. Whether you’re an employee, a gig worker, or run your own business, a careful approach can help you make the most of your tax position this year.
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What’s Changed for 2026? Key Updates to Know
Several updates have come into effect for the 2024–25 financial year, impacting how you prepare your tax return and what you might expect from your refund.
Stage 3 Tax Cuts
From 1 July 2024, Stage 3 tax cuts have reduced marginal tax rates for many Australians. This means more take-home pay throughout the year, but it could also mean a smaller refund at tax time if you’re used to receiving a larger lump sum. It’s important to review your payslips and understand how these changes affect your overall tax position.
Work-from-Home Deduction Changes
The ATO has updated the rules for claiming work-from-home expenses. From July 2024, you’ll need to keep a daily record of hours worked from home and retain receipts for all expenses you wish to claim. The fixed rate method has increased to 70 cents per hour, covering electricity, internet, phone, and consumables. However, depreciation of office furniture and equipment must be claimed separately, requiring additional documentation.
Rental Property Deductions Under Scrutiny
Rental property owners should be aware that the ATO is placing greater emphasis on accurate reporting of rental deductions. Enhanced data-matching technology is being used to check claims for interest, repairs, and occupancy periods, especially for short-term rentals. Keeping thorough records and ensuring claims are accurate is essential.
Superannuation Guarantee Increase
The superannuation guarantee rate increased to 11.5% in July 2024. While this affects employer contributions, individuals can still make personal deductible contributions to super, which may help reduce taxable income and increase your refund, particularly for those with variable earnings.
Practical Strategies to Maximise Your Refund
While tax returns are becoming more complex, there are still effective ways to improve your outcome. Here are some practical steps to consider:
Claim All Eligible Deductions
Don’t overlook work-related expenses that you’re entitled to claim. These may include:
- Union fees and professional memberships
- Self-education expenses related to your current job
- Laundry costs for occupation-specific clothing
- Work-related travel and car expenses (if you meet the criteria)
If you work from home, ensure you have detailed records to support your claims. Only claim expenses that are directly related to earning your income and for which you have evidence.
Prepay Deductible Expenses
If you’re self-employed or have a side business, consider prepaying up to 12 months of deductible expenses—such as insurance premiums or professional subscriptions—before 30 June. This can bring forward deductions into the current financial year and potentially increase your refund.
Consider Personal Super Contributions
Making a personal contribution to your superannuation fund and notifying your fund of your intention to claim a deduction can be a tax-effective strategy. This can reduce your taxable income, which may result in a higher refund. Be sure to check your contribution limits and allow enough time for the contribution to be processed before the end of the financial year.
Offset Capital Gains with Losses
If you’ve sold shares, cryptocurrency, or investment property during the year, you may have realised a capital gain. You can offset these gains by realising capital losses elsewhere in your portfolio, or carry forward unused losses to future years. Accurate record-keeping is essential for this strategy.
Seek Professional Advice When Needed
Tax laws and entitlements can be complex, especially if you have multiple income streams, investments, or run a business. A registered tax agent can help identify deductions you may have missed and ensure your return is accurate. This can be particularly valuable if your situation has changed or if you’re unsure about recent rule changes.
Common Pitfalls to Avoid
With the ATO increasingly using automated systems and data-matching technology, it’s important to avoid common mistakes that can lead to delays or audits.
Overclaiming Without Evidence
Claiming standard amounts for work expenses without receipts or clear links to your income is a common audit trigger. The ATO expects itemised records and may request proof for any deductions claimed. Only claim what you can substantiate.
Double-Dipping Deductions
You cannot claim the same expense twice. For example, if you use the fixed rate method for working from home, you cannot also claim actual costs for the same expenses. Choose the method that gives you the largest legitimate deduction and apply it consistently.
Incorrect Rental Property Claims
Rental property deductions are under close scrutiny. Be careful with claims related to personal use periods, distinguishing between repairs and improvements, and ensuring that loan redraws for private expenses are not claimed as deductions. Keeping a detailed log and using separate bank accounts for rental properties can help keep your records clear.
Omitting Income
The ATO receives information from banks, employers, sharing economy platforms, and investment providers. Failing to declare all your income—including side gigs or investment earnings—can result in penalties or delays. Double-check that all your income sources are included in your return.
Planning Ahead: Record-Keeping and Organisation
Good record-keeping is the foundation of a successful tax return. Start gathering your documents early, including:
- Income statements from employers and other sources
- Receipts and invoices for deductible expenses
- Statements for investment income and capital gains
- Superannuation contribution confirmations
Organising your paperwork throughout the year can make tax time less stressful and help ensure you don’t miss out on legitimate deductions.
The Bottom Line
The 2026 tax season brings both new challenges and opportunities for Australians. By staying informed about the latest rules, keeping thorough records, and understanding your entitlements, you can put yourself in the best position to maximise your refund. Whether you lodge your return yourself or seek professional assistance, a proactive approach can help you turn tax time into a financial advantage.