FY26 Tax Planning and Strategies for Individuals

By bringing forward allowable deductions into 2025-26, you reduce your taxable income at your current marginal tax rate. If you expect your income to be lower next year, bringing deductions forward is particularly worthwhile.

Examples of deductions that may be brought forward:

• Professional subscriptions and memberships

• Income protection insurance premiums

• Work-related education costs

Documentary Evidence Required

For any deduction you bring forward, you must hold a valid tax invoice or receipt dated in the 2025-26 financial year. Paying before 30 June is not sufficient on its own. You must also have the documentation.

If you are under the age of 75, you may be able to salary sacrifice tax-deductible contributions from your employer up to the concessional contributions cap of $30,000 for the 2025–26 financial year. This cap includes employer Superannuation Guarantee contributions, so factor those in when calculating how much additional room you have.

Note: Contributions must be received by your super fund before 1 July 2026 to count in this financial year.

If your total superannuation balance was less than $500,000 at 30 June 2025, you may be able to carry forward unused concessional cap amounts from up to five previous financial years. This allows you to contribute more than the standard $30,000 cap and claim the additional amount as a tax deduction.

This can be particularly valuable if you had a lower-income year in a prior period, had a gap in contributions (e.g. due to parental leave or illness), or have recently come into a lump sum you'd like to shelter in super.

The additional deductible contributions may produce a deduction at this year's higher marginal tax rate, which is generally more valuable than at a lower future rate.

Documentary Evidence Required

You will need to check your available carry-forward balance via myGov / ATO online before contributing. We can assist our clients with these checks.

If you have made contributions to your super fund from your after-tax income (i.e. not through salary sacrifice), you may be able to claim a deduction for those contributions — provided you meet the eligibility criteria.

To do this, you must:

• Lodge a Notice of Intent to Claim a Deduction with your super fund before lodging your tax return.

• Ensure contributions are received by your fund before 1 July 2026.

Important

Once you lodge a Notice of Intent, the contribution is treated as concessional and taxed at 15% within the fund. We can assist our clients with these checks.

If you hold shares, managed funds, or other investment assets, the end of the financial year is a good time to review your portfolio for tax planning purposes.

• CGT discount: Assets held for more than 12 months attract a 50% CGT discount for individuals. If you are planning to sell, consider whether you have held the asset for the required period.

• Crystallising losses: If you have unrealised capital losses, selling before 30 June allows those losses to offset capital gains made during the year.

• Timing of sales: If possible, defer the sale of a profitable asset until after 30 June if your income will be lower next year.

Documentary Evidence Required

Keep records of all buy and sell transactions, including brokerage fees. Your cost base calculation depends on accurate records from the original purchase date.

If you work from home, you may be able to claim a deduction using the ATO's fixed rate method of 70 cents per hour worked from home. This rate covers electricity, gas, internet, phone, and stationery. You cannot claim those items separately on top of the fixed rate.

Alternatively, you can use the actual cost method, which requires more detailed records but may produce a higher deduction if you have a dedicated home office and significant running expenses.

Key record-keeping requirements:

• Fixed rate method: you must keep a record of every hour worked from home across the full income year. The ATO no longer accepts a four-week representative sample.

• Actual cost method: you must be able to apportion each expense (power, internet, etc.) between work and personal use, supported by bills and usage records.

• In addition to the hourly rate, you can separately claim the decline in value of work-related assets (laptop, monitor, desk, chair).

Documentary Evidence Required

• A record of actual hours worked from home (diary, timesheet, calendar entries, or employer records)

• Receipts for any equipment or furniture claimed separately

• Evidence of the work-related portion of phone and internet costs if claiming under the actual cost method

The ATO has flagged WFH deductions as an area of active compliance focus. Claims without records are being disallowed.

Investment property owners should ensure all income and expenses are correctly accounted for in FY26. The ATO continues to focus on rental deductions, particularly interest claims, repairs vs capital improvements, and short-term rental arrangements such as Airbnb.

Common deductions include:

• Interest on loans used to purchase or improve the property

• Property management fees

• Council rates, water rates, and land tax

• Repairs and maintenance (note: improvements are not immediately deductible — they must be depreciated)

• Insurance premiums

• Depreciation on plant and equipment (requires a quantity surveyor's report if you don't have one)

If your property was rented at less than market rate (e.g. to a family member), your deductions will be proportionally limited.

Documentary Evidence Required

Keep all invoices, receipts, and loan statements relating to the property. If you are claiming depreciation, ensure your depreciation schedule is current — particularly if there have been improvements or new assets installed.

If you bought, sold, exchanged, or used cryptocurrency during 2025–26, you likely have a tax obligation. The ATO treats cryptocurrency as a capital gains tax asset — it is not treated as currency.

Taxable events include:

•  Selling crypto for Australian dollars

• Exchanging one cryptocurrency for another

• Using crypto to purchase goods or services

•  Receiving crypto as income (e.g. staking rewards, airdrops, mining)

Documentary Evidence Required

Export complete transaction history from every exchange or wallet you used. Records must show date, type of transaction, cost in AUD at time of transaction, and proceeds.

The most common reason a tax deduction is disallowed is the lack of proper records. For virtually every deduction you claim, the ATO requires you to hold written evidence — and you must be able to produce it on request.

What counts as valid documentary evidence:

• Tax invoices (showing supplier's ABN, description of goods or services, and GST amount)

• Receipts for cash purchases

• Logbooks for vehicle claims

• Written contracts or agreements

• Bank or credit card statements (as a supporting document only — not a standalone record)

•  Diary records (for work-related travel under $10, and for work-from-home hours)

Our recommendation: keep records as you go — not at tax time. Digital copies are accepted. Apps such as Hubdoc or your phone camera are all you need.

If a receipt is missing, contact the supplier or your bank for a copy before you lodge. The ATO's audit focus on substantiation has increased significantly — don't assume a bank statement will be enough.