Tax tips to act on how to reduce your ATO bill and maximise your return: ‘Opportunity is there’
H&R Block director of communications Mark Chapman has shared his end of year tax planning tips. (Source: Yahoo Finance)·Source: Yahoo Finance
As the end of financial year approaches, there’s a predictable shift in behaviour. Investors scramble to crystallise losses, employees rush to buy “deductible” items, and small business owners look for last-minute ways to reduce their tax bill. But in practice, effective year-end tax planning is less about quick wins and more about timing, intent and discipline.
What I’m seeing this year is a mix of good intentions and rushed decisions—some of which can do more harm than good. The reality is that the Australian Taxation Office is increasingly focused on patterns of behaviour, not just individual transactions. That means strategy matters more than ever.
This is particularly relevant for discretionary spending—buying equipment, prepaying expenses, or rushing into investments without proper due diligence. While bringing forward deductions can make sense in some cases, it should only be done where the underlying purchase is commercially or personally justified.
In other words, tax should be a factor—not the driver.
One of the most effective (and legitimate) year-end strategies is managing the timing of income and expenses.
For individuals, this might mean deferring income where possible—such as delaying the receipt of bonuses or invoicing until after June 30. Conversely, bringing forward deductible expenses—like work-related costs or interest on investment loans—can help reduce taxable income in the current year.
For small businesses, the opportunities are broader. Prepaying certain expenses, writing off bad debts, or reviewing stock valuations can all influence the year-end position.
But here’s the catch: these strategies only work if they reflect genuine commercial activity.
The ATO is very clear on this—transactions need to have substance, and artificial arrangements designed purely to reduce tax are likely to attract scrutiny.
One of the most effective year-end strategies is managing the timing of income and expenses. (Source: Getty)
Tax-loss selling is a perennial EOFY strategy, particularly for investors in shares and managed funds. Realising losses before June 30 can offset capital gains and reduce tax.
But what I’m seeing more frequently is investors falling foul of anti-avoidance rules—particularly where assets are sold and quickly repurchased.
If you sell an asset to crystallise a loss and then buy it straight back, you’re entering dangerous territory. While Australia doesn’t have a formal “wash sale” rule in the legislation, the ATO can apply anti-avoidance provisions where the dominant purpose is to obtain a tax benefit.
The key is ensuring that any sale reflects a genuine change in investment position—not just a temporary transaction to manufacture a loss.
Superannuation remains one of the most effective tax planning tools available, particularly for those looking to reduce taxable income.
Concessional contributions—such as employer contributions and salary sacrifice—are generally taxed at 15 per cent within the fund, which is often significantly lower than an individual’s marginal tax rate.
What we’re seeing in practice is that many people underutilise their contribution caps, especially those with variable income or large capital gains in a particular year.
However, it’s important to stay within the contribution limits and ensure contributions are received by the fund before the deadline—not just initiated.
Work-related claims remain a key focus area for the ATO, particularly in the post-pandemic environment where hybrid work is now the norm.
There’s no such thing as a “standard deduction”, despite what some taxpayers believe. Every claim needs to be substantiated and directly related to earning income.
For working from home, this means keeping records of hours worked and understanding which method you’re using to calculate your claim. For other expenses—like mobile phones, internet, or equipment—apportionment between work and private use is essential.
EOFY is also a good time to review your capital gains position more broadly.
This includes not just realised gains, but also unrealised positions that may influence future decisions. For example, holding an asset for more than 12 months may entitle you to the CGT discount—but only if the asset is held on capital account.
What matters here is not just how long you hold the asset, but why you acquired it in the first place, which is a distinction that often gets overlooked.
For property investors and active traders, this can be particularly relevant, as the line between capital gains and revenue income is not always clear.
If there’s one consistent theme across all year-end strategies, it’s record-keeping.
Good records don’t just support deductions—they enable better decision-making.
Yet it’s still one of the most neglected areas.
In practice, the difference between a smooth tax season and a stressful one often comes down to documentation, whether that’s receipts, bank statements, or detailed logs of work-related use.
Year-end tax planning is not about last-minute tactics—it’s about aligning your financial decisions with the tax rules in a way that is both effective and defensible.
What I’m seeing in practice is that those who take a measured, informed approach tend to achieve better outcomes than those chasing quick fixes.
The opportunity is there—but so is the risk.
Because in today’s environment, it’s not just what you claim that matters. It’s whether you can justify it.
