Tax time in Australia is about more than just paperwork—it’s a golden opportunity to put money back in your pocket. The secret weapon? Write-offs. As we head into the 2025 financial year, knowing what you can write off, and how, is more important than ever. Whether you’re running a business, side hustle, or just want to maximise your individual tax return, understanding the latest rules can mean serious savings.
What is a Write-Off and Why Does It Matter?
A ‘write-off’ is the common term for a tax deduction—an expense you can claim to reduce your taxable income. The lower your taxable income, the less tax you pay. For many Australians, write-offs can mean hundreds or even thousands of dollars in savings every year.
Common examples of write-offs include:
- Work-related expenses (tools, uniforms, travel)
- Home office costs (internet, electricity, equipment)
- Depreciating assets (laptops, vehicles)
- Interest on business loans
- Charitable donations
But not every expense qualifies, and the rules change regularly. That’s why staying updated is crucial.
2025 Write-Off Policy Updates: What’s Changed?
The 2025 financial year brings some significant changes to what you can write off, especially for small businesses and sole traders. Here are the most important updates:
- Instant Asset Write-Off Threshold: The instant asset write-off threshold has been set at $30,000 for eligible businesses with an aggregated turnover of less than $50 million. Assets must be first used or installed ready for use between 1 July 2024 and 30 June 2025.
- Temporary Full Expensing Ends: The temporary full expensing measure, which allowed businesses to immediately deduct the full cost of eligible depreciating assets, ended on 30 June 2024. From 1 July 2024, the rules revert to the traditional depreciation schedules for most assets.
- Work-from-Home Deductions: The ATO has updated the fixed rate method for claiming home office expenses to 70 cents per hour worked from home. This covers energy, internet, phone, and stationery, but you need to keep detailed records of your hours worked.
- Electric Vehicles: The Fringe Benefits Tax (FBT) exemption for eligible electric vehicles remains in place for 2025, but with stricter reporting requirements. This can be a substantial write-off for businesses providing EVs to employees.
Keeping up with these updates is essential to avoid missing out—or claiming incorrectly and attracting ATO scrutiny.
How to Maximise Your Write-Offs: Practical Strategies
Getting the most out of your write-offs requires a proactive approach. Here’s how to make the most of 2025’s opportunities:
- Track Everything: Keep digital copies of receipts, invoices, and bank statements. Apps like Xero or MYOB can simplify this process for business owners and freelancers.
- Don’t Overlook Small Expenses: Individually minor costs (like office supplies or mileage) add up. Claiming every eligible expense can make a big difference.
- Review Asset Purchases: If you’re planning a big equipment purchase, check if it qualifies for the instant asset write-off. Timing your purchase before 30 June 2025 could mean a bigger deduction this year.
- Home Office Savvy: With more Australians working remotely, maximise home office claims by maintaining detailed logs of hours and expenses. Remember, you can’t claim both the fixed rate and actual costs for the same expenses.
- Professional Help Pays Off: Complex write-offs, like those for vehicles or investment properties, are best handled with professional advice to ensure compliance and maximise your return.
Let’s take a real-world example. Sarah, a Melbourne-based graphic designer, spent $2,500 on a new computer, $300 on software, and $1,200 on internet and electricity for her home office. Thanks to the instant asset write-off and the new fixed rate method, she can claim these as deductions and potentially reduce her taxable income by over $4,000.
Write-Off Pitfalls to Avoid in 2025
While write-offs are powerful, mistakes can be costly. Here are common traps:
- Poor Record-Keeping: No receipts, no deduction. The ATO is cracking down on unsubstantiated claims.
- Personal vs. Business Use: Only the business portion of an expense is deductible. If you use your phone 60% for work, only claim 60% of the bill.
- Claiming Disallowed Items: The ATO regularly updates what’s in and out. For instance, private expenses or travel unrelated to work aren’t deductible.
Understanding these pitfalls can help you steer clear of ATO audits and penalties.
The Bottom Line: Smarter Write-Offs Mean Bigger Refunds
Write-offs remain one of the best ways to reduce your tax bill in Australia. With the 2025 updates, there are fresh opportunities—and new rules to follow. Staying informed, keeping detailed records, and making strategic purchases can help you take full advantage of what’s on offer.
