Every so often, life throws us a financial curveball—a sudden inheritance, an unexpected redundancy payout, or perhaps a costly medical bill. These are classic examples of one-time items: unique financial events that don’t recur regularly but can dramatically impact your budget, tax return, and even your long-term plans. As 2025 brings fresh tax rules and evolving financial strategies, understanding one-time items is more important than ever for Australians seeking to optimise their money moves.
What Are One-Time Items, and Why Do They Matter?
One-time items are financial events or transactions that are not part of your regular income or expenses. They might include:
- Bonuses or redundancy payouts
- Windfalls like lottery winnings or large gifts
- Unusual expenses such as major medical bills or legal settlements
- Asset sales, such as selling an investment property or shares
Unlike your weekly wage or monthly bills, one-time items can create spikes—or dips—in your financial landscape. For individuals, they might mean a sudden cash surplus or a hefty outlay. For businesses, reporting one-time items accurately is crucial for transparency and for investors interpreting financial statements.
How One-Time Items Affect Your Tax Return in 2025
The Australian Taxation Office (ATO) treats one-time items differently depending on their nature. As of the 2025 tax year, several updates affect how you should report and manage these events:
- Redundancy and Early Retirement Payouts: Changes in 2025 have adjusted the tax-free thresholds and reporting requirements. Some payouts may be partially tax-free, while others are taxed at your marginal rate.
- Capital Gains: Selling assets like shares or property triggers a capital gains event. The 50% CGT discount for assets held over a year remains, but new reporting standards require detailed documentation of acquisition and improvement costs.
- Medical Expenses: While the net medical expenses tax offset has largely been phased out, certain disability and aged care expenses can still be claimable in 2025 under revised eligibility rules.
Reporting one-time items correctly is critical. For example, if you sell an investment property, you must declare the gain or loss in your tax return. Failing to do so can result in audits or penalties. Conversely, missing out on available offsets or concessions means leaving money on the table.
Real-World Examples: Managing Windfalls and Unexpected Costs
Let’s put this into practice with a few typical 2025 scenarios:
- Redundancy Package: After 10 years with a tech firm, Lisa receives a redundancy payout of $80,000. Thanks to 2025’s updated tax-free limits, the first $11,985 is tax-free, with the remainder taxed at concessional rates. She uses part of the after-tax funds to pay down her mortgage, reducing future interest costs.
- Inheritance: Mark inherits $150,000 from a distant relative. In Australia, inheritances aren’t taxed as income, but if he sells inherited shares or property, CGT rules apply based on the asset’s original acquisition date and value.
- Unexpected Medical Bill: After an accident, Priya faces a $12,000 hospital bill. She reviews eligibility for any remaining medical expense offsets and investigates payment plans to avoid high-interest credit card debt.
Each scenario shows why planning and record-keeping are vital. A windfall can be an opportunity to boost savings or pay off debt, while an unexpected expense might require dipping into an emergency fund or adjusting your budget.
Smart Strategies for 2025: Making One-Time Items Work for You
- Document Everything: Keep detailed records for any one-time event—contracts, receipts, payout letters, and correspondence. The ATO’s MyGov platform allows easy upload and tracking.
- Consider Tax Timing: If you can choose when to realise a gain (e.g., selling shares), consider the timing to manage your tax bracket or offset against losses.
- Financial Planning: Windfalls are a chance to reassess your goals. Consider speaking with a financial planner about investing, paying down debt, or boosting your superannuation.
- Emergency Buffer: If you’re hit with a one-off expense, review your emergency fund strategy. 2025 surveys show most Australians feel more secure with three to six months’ expenses saved.
Remember, a one-time item doesn’t have to throw your finances off course. With the right approach, it can even accelerate your progress toward bigger goals.
