Most tax optimisation is not about clever strategies or grey-area claims. It is about making sure you are using every legitimate entitlement you are already qualified for. Here are five of the most commonly missed opportunities — each legal, ATO-compliant, and available to most working Australians.
Extra Super Contributions — Particularly Valuable at Higher Income Levels
Voluntary concessional (before-tax) superannuation contributions are taxed at only 15% inside the fund — regardless of your marginal rate. For someone earning $135,000 (37% marginal rate), each $1 contributed to super saves 22 cents in tax compared to taking the same dollar as salary.
- The 2025-26 concessional contribution cap is $30,000 per year (including your employer's SGC contributions)
- If your super balance is under $500,000, you may be able to carry forward unused caps from the past five years
- You must submit a Notice of Intent to Claim a Deduction to your super fund before lodging your tax return — without this form, the tax deduction cannot be claimed
- Most valuable for individuals earning over $90,000, particularly in the 37–45% tax brackets
Investment Property Depreciation — The Deduction Most Landlords Miss
Most investment property owners claim their mortgage interest. Far fewer claim the depreciation deductions they are entitled to. Building depreciation (Div 43) and plant and equipment depreciation (Div 40) — hot water systems, air conditioning, carpets, blinds — are legitimate annual deductions that require a Tax Depreciation Schedule from a Quantity Surveyor.
- Cost of a depreciation schedule: approximately $300–$500 (one-time)
- Typical annual depreciation deduction: $3,000–$15,000+ depending on property age and fit-out
- The depreciation report is reused every year for the life of the property — it is one of the most cost-effective tax investments available
- Note: Do not confuse repairs (immediately deductible) with capital improvements (depreciated over 40 years)
Work-Related Vehicle Expenses
Travel between your home and regular workplace is not deductible. But travel between client sites, to a second workplace, to carry heavy equipment, or to attend work-related training can be claimed. There are two methods:
Car Expense Methods
Cents per Kilometre Method: 85 cents per kilometre (2025-26 rate) for up to 5,000 km. No receipts required — but you must have a reasonable basis for the distance claimed.
Logbook Method: Keep a continuous log for 12 weeks covering date, destination, purpose, and distance. Apply the business-use percentage to actual annual vehicle costs (fuel, insurance, registration, depreciation). Usually produces a larger deduction for high work-use vehicles.
Working From Home — Two Options, Different Outcomes
If you worked from home during the year, you can claim either:
- Fixed Rate Method: 67 cents per hour worked from home. This already includes phone, internet, stationery and consumables — do not also claim these separately.
- Actual Cost Method: Claim the actual proportion of electricity, internet, and equipment depreciation used for work purposes. Requires a dedicated work area and detailed records. Often produces a higher deduction for those with a home office.
Private Hospital Cover — Avoiding the Medicare Levy Surcharge
Australians earning above $93,000 (single) who do not hold an eligible private hospital policy are subject to the Medicare Levy Surcharge (MLS) of 1.0–1.5% of their taxable income. A basic hospital policy typically costs $1,200–$2,000 per year — often less than the surcharge you would otherwise pay.
Medicare Levy Surcharge — Common Mistake
Only hospital cover (not extras/general treatment cover) exempts you from the MLS.
Buying extras cover only (dental, optical, physiotherapy) does not remove the surcharge obligation.
If you are above the threshold and do not have hospital cover, review whether purchasing a basic policy would save you money on net.
General information only
This article provides general tax information only and does not constitute personal tax, legal, or financial advice. Tax rules can change and individual circumstances vary.
If you would like advice based on your situation, please get in touch with the practice.
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