What to Do Before 30 June to Reduce Tax in Australia: A Guide for FY 2025–26

The period leading up to 30 June presents a structured opportunity for individuals and businesses to review their financial positions and implement strategies that may influence their tax outcomes. This article provides a detailed checklist addressing the question, 'what should you do before 30 June to reduce your tax in Australia?'. It focuses on compliance and planning considerations relevant to the FY 2025–26 financial year, offering actionable insights for various taxpayer circumstances, from sole traders to complex company structures.

This guide is structured as a comprehensive roundup, organised by specific actions you can take. It covers key areas such as superannuation contributions, business expense claims, capital gains management, and property investment deductions. The information is designed to be educational, assisting you in navigating these topics with a clear, methodical framework. The goal is to provide specific, practical details and real-world scenarios to help you make informed decisions. We will outline common pitfalls and ATO compliance notes to ensure your end-of-financial-year activities are both effective and correctly executed.

Based on observations at Baron Tax & Accounting, a frequent issue for Brisbane-based taxpayers is the misunderstanding of deadlines; actions such as superannuation contributions must be received and cleared by the fund, not just initiated, before the 30 June cut-off to be valid for the financial year.

1. Maximise Superannuation Contributions

Making personal concessional (pre-tax) superannuation contributions is an effective strategy for reducing taxable income. This method involves voluntarily adding funds to your superannuation account, which can then be claimed as a tax deduction. These contributions are taxed at a concessional rate of 15% inside the super fund, which is often lower than an individual's marginal tax rate.

This difference between your personal tax rate and the 15% superannuation tax rate can create a direct tax saving. For those considering what they should do before 30 June to reduce their tax in Australia, reviewing superannuation contributions is a primary consideration for building long-term wealth in a tax-effective environment.

How It Works in Practice

Employees can arrange a salary sacrifice agreement with their employer, where a portion of their pre-tax salary is directed into their super fund. For self-employed individuals or those wanting to make a lump-sum contribution, a personal contribution can be made directly to their super fund. They must then complete a 'Notice of intent to claim a deduction' form and submit it to their fund.

Key Insight: The timing is critical. The contribution must be received and processed by your superannuation fund before the close of business on 30 June. A bank transfer made on 30 June may not clear in time, so it is advisable to act at least a week earlier.

Actionable Tips Before 30 June

• Check Your Cap: The concessional contributions cap includes all employer contributions (Superannuation Guarantee), salary sacrifice, and personal deductible contributions. Review your contributions to date to ensure you do not exceed the annual cap.

• Notify Your Fund: If making a personal contribution, ensure you lodge a valid 'Notice of intent to claim or vary a deduction for personal super contributions' with your fund and receive an acknowledgement before you lodge your tax return.

• Employees: If you want to salary sacrifice, contact your payroll department well before June to ensure the arrangements are in place for your final pay runs of the financial year. To understand the mechanics in detail, you can find more information in this practical guide for Australians on how to salary sacrifice super.

2. Prepare Work-Related Expense Claims

Claiming deductions for work-related expenses is a fundamental strategy for reducing taxable income. If you have spent your own money on items directly related to earning your income and have not been reimbursed by your employer, you may be eligible to claim a deduction. Common claims made before the 30 June deadline include home office running costs, self-education expenses, professional membership fees, and costs associated with work-related travel.

This process lowers your assessable income, which in turn reduces the amount of tax you are required to pay. For anyone asking what they should do before 30 June to reduce their tax in Australia, a thorough review of all potential work-related expenses incurred during the financial year is a crucial step. Ensuring you have the necessary records to substantiate these claims is key.

How It Works in Practice

To claim a deduction, you must have spent the money yourself and not been reimbursed, the expense must directly relate to earning your income, and you must have a record to prove it. For example, a teacher who buys classroom supplies can claim those costs, or a tradesperson who purchases tools for their job can deduct the expense. Similarly, an accountant who pays for their annual professional membership can claim that fee.

Key Insight: Record-keeping is non-negotiable. The Australian Taxation Office (ATO) requires you to substantiate your claims with receipts, invoices, or bank statements. For vehicle expenses, a detailed logbook is often necessary to establish the work-related usage percentage.

Actionable Tips Before 30 June

• Collate Your Records: Gather all receipts, invoices, and bank statements for any work-related purchases made throughout the year. Digital copies are acceptable.

• Assess Home Office Hours: If you work from home, calculate your total hours worked from home for the financial year. You can use the ATO's fixed rate method (67 cents per hour for FY 2025–26) or the actual cost method if your expenses are significant.

• Log Vehicle Use: For work-related car expense claims, ensure your logbook is up to date. A logbook must be kept for a continuous 12-week period to be valid for five years, provided your work circumstances do not change.

• Review All Potential Claims: Think beyond the obvious. Costs like union fees, professional journal subscriptions, and laundry for occupation-specific clothing can also be deductible. You can find out more about the top 10 common tax deductions people miss in Australia.

3. Utilise Capital Losses and Tax Loss Harvesting

For investors, one of the most direct methods to reduce tax liability before 30 June is to strategically realise capital losses. This process, known as tax loss harvesting, involves selling underperforming assets to create a capital loss, which can then be used to offset capital gains realised from the sale of other assets during the financial year. This effectively reduces your net capital gain and, consequently, the amount of Capital Gains Tax (CGT) you are required to pay.

If you're asking what you should do before 30 June to reduce your tax in Australia, reviewing your investment portfolio for potential tax loss harvesting opportunities is a critical step. This is particularly relevant for active share traders, property investors, and cryptocurrency holders who may have realised significant gains elsewhere. Any net capital losses that remain after offsetting gains can be carried forward indefinitely to offset future capital gains.

How It Works in Practice

The strategy involves selling an investment that is currently valued lower than its purchase price (its cost base). The date of the contract for sale must be on or before 30 June for the capital loss to be realised in that financial year. For example, a share investor in Brisbane might sell underperforming tech stocks to crystallise a loss, which can then reduce the taxable gain from a profitable sale of mining shares earlier in the year.

Key Insight: Be mindful of the ATO's 'wash sale' provisions. The ATO may disallow a capital loss if you sell and then almost immediately repurchase the same or a substantially similar asset. A common practice is to wait a period of time before repurchasing the identical asset to avoid scrutiny.

Actionable Tips Before 30 June

• Review Your Portfolio: Systematically analyse all your investments (shares, property, crypto) to identify assets with unrealised losses that no longer align with your investment goals.

• Match Gains with Losses: Calculate your total realised capital gains for the year and identify sufficient capital losses to offset them where strategically appropriate.

• Maintain Detailed Records: Keep meticulous records of all transactions, including purchase and sale dates, prices, and brokerage fees. This documentation is essential for calculating your net capital gain or loss and for carrying forward any unused losses.

• Consult a Professional: Discuss your tax loss harvesting strategy with a tax professional to ensure it aligns with your long-term investment plan and complies with all ATO rules.

4. Accelerate Business Expense Claims and Depreciation

For business owners and sole traders, strategically timing the payment of eligible business expenses before 30 June is a direct way to reduce taxable income for the financial year. This approach involves paying for necessary operational costs, supplies, or repairs just before the deadline, ensuring the deduction can be claimed in the current period. This not only lowers the immediate tax liability but can also improve cash flow by bringing forward tax benefits.

This tactic is a fundamental part of year-end tax planning for any Australian business, from a sole trader in Brisbane to a larger company. When considering what you should do before 30 June to reduce your tax in Australia, accelerating deductible expenditure offers a practical and immediate impact on your final tax assessment.

How It Works in Practice

For a business expense to be deductible in a particular financial year, it must generally be incurred and, in many cases for small businesses, paid before 30 June. This applies to a wide range of costs, from office stationery and professional subscriptions to repairs and maintenance on business equipment. For larger assets, depreciation rules allow a portion of the asset's cost to be claimed each year, and acquiring these assets before the deadline can initiate this process.

Key Insight: For an expense to be claimed, the business must have legally incurred it. This means you have a binding obligation to pay for the goods or services, and the payment must be processed and cleared before the 30 June cut-off.

Actionable Tips Before 30 June

• Review Upcoming Expenses: Examine your budget for July and August. If there are planned purchases for supplies, software, or tools, consider bringing them forward into June.

• Purchase and Pay: Ensure that any items you wish to claim are not only invoiced but also paid for before 30 June.

• Maintain Detailed Records: Keep all tax invoices and receipts meticulously organised. Clearly distinguish between repairs (immediately deductible) and capital improvements (depreciated over time).

• Consider Asset Purchases: Acquiring new equipment, vehicles, or machinery before the deadline allows you to start claiming depreciation. Small businesses should be aware of specific rules like the instant asset write-off, and you can explore more about this in this simple guide for Australian businesses on the instant asset write-off.

5. Manage Rental Property Deductions

For property investors, the period leading up to 30 June is a critical time to review and collate all claimable expenses. Effective management of rental property deductions can substantially reduce taxable income. When your deductible expenses, such as mortgage interest, council rates, insurance, and repairs, exceed your rental income, this results in a rental loss. This loss can then be offset against other sources of income, like your salary, leading to a lower overall tax liability.

This strategy is a cornerstone for many considering what they should do before 30 June to reduce their tax in Australia. By meticulously tracking every legitimate expense associated with an investment property, investors can ensure they are not overpaying tax.

How It Works in Practice

Throughout the financial year, you incur various costs to maintain your rental property. These costs fall into categories such as borrowing expenses, maintenance, and capital works. Before the end of the financial year, you should gather all invoices, receipts, and statements for these expenses. For example, a property investor with $50,000 in rental income who has accrued $60,000 in deductible expenses can claim a $10,000 loss against their other income.

Key Insight: A common oversight is the distinction between a repair and an improvement. A repair, which is immediately deductible, restores something to its original state (e.g., fixing a broken window). An improvement, which is depreciated over time, enhances the property beyond its original condition (e.g., adding a new deck). Correctly categorising these expenses is vital for compliance.

Actionable Tips Before 30 June

• Gather All Records: Compile and organise all receipts, bank statements, and invoices related to property management fees, council rates, insurance, land tax, advertising for tenants, and body corporate fees.

• Obtain a Depreciation Schedule: If you don't have one, engage a qualified quantity surveyor to prepare a depreciation schedule. This report details the deductions available for the decline in value of the building's structure and the plant and equipment assets within it.

• Review Loan Statements: Scrutinise your loan statements to confirm the exact amount of interest paid. If a loan is used for both investment and private purposes, the interest must be apportioned correctly. A comprehensive understanding of specific rental property tax deductions is valuable.

• Pre-pay Expenses: Consider pre-paying certain expenses for the next financial year, such as insurance premiums or interest on your investment loan, to bring forward the tax deduction into the current year. You can learn more about how this works in our guide to negative gearing explained for property investors.

6. Establish or Optimize Trust Distributions

For those with a discretionary or family trust, optimising income distributions is a critical strategy to consider when deciding what you should do before 30 June to reduce your tax in Australia. Trusts offer flexibility by allowing income and capital gains to be legally distributed among various beneficiaries. This enables the total tax paid by the beneficiary pool to be minimised by allocating income to individuals on lower marginal tax rates.

This method is particularly valuable for family businesses and investment holding structures. By strategically directing income to spouses, adult children, or retired parents with little to no other income, you can utilise their lower tax brackets and tax-free thresholds, reducing the overall tax liability.

How It Works in Practice

The trustee of a discretionary trust must decide on and document how the trust's income for the financial year will be distributed among its beneficiaries. For these distributions to be effective for tax purposes, a valid trustee resolution must be made on or before 30 June. For example, a family business operating through a trust could distribute profits to an adult child studying at university whose personal income is below the tax-free threshold.

Key Insight: The trustee resolution is legally binding and must be made by 30 June. Failing to make a valid resolution can result in the trustee being taxed on the trust's net income at the highest marginal tax rate, a costly oversight.

Actionable Tips Before 30 June

• Review Your Trust Deed: Before making any decisions, confirm your trust deed allows for the intended distributions and understand any specific requirements it contains.

• Identify Beneficiaries: Assess the taxable incomes of all potential beneficiaries to identify those on the lowest marginal tax rates.

• Document Resolutions: Ensure your distribution decisions are properly documented in a trustee resolution and signed before the 30 June deadline. This is a strict ATO requirement.

• Beware Minor Beneficiary Rules: Be cautious when distributing to beneficiaries under 18. Special tax rates apply to most trust income distributed to minors, which can negate any tax benefits.

7. Claim Spousal Super Contributions and Rebates

Supporting a partner's retirement savings can also provide an immediate tax benefit. A spouse superannuation contribution allows a higher-income earner to contribute to their low-income spouse's super fund and claim a tax offset. This strategy effectively reduces your tax bill while simultaneously building the retirement nest egg of your partner.

This approach is particularly beneficial for single-income families or couples where one partner has taken a career break or works part-time. For those deciding what they should do before 30 June to reduce their tax in Australia, this is a dual-purpose action that provides a direct tax offset and strengthens long-term household financial security.

How It Works in Practice

The higher-earning spouse makes a non-concessional (after-tax) contribution directly into their eligible spouse's superannuation account. The contributing spouse can then claim a tax offset of up to $540 in their personal tax return. The full offset is available if you contribute at least $3,000 and your spouse's assessable income, reportable fringe benefits, and reportable employer super contributions total $37,000 or less. The offset gradually reduces for income above this threshold and phases out completely once the spouse's income reaches $40,000.

Key Insight: The contribution must be physically received by your spouse's super fund before the 30 June cut-off. Simply initiating a transfer on the last day is not sufficient; ensure you allow several business days for the funds to clear.

Actionable Tips Before 30 June

• Verify Spouse's Income: Before making any contribution, confirm your spouse's total income for the financial year will be below the $40,000 threshold to ensure you are eligible for the tax offset.

• Confirm Fund Acceptance: While most super funds accept spousal contributions, it is prudent to check with your spouse's fund to confirm their process.

• Make the Contribution: Transfer the funds well before the end of June to avoid any processing delays. You will need your spouse's super fund details and member number.

• Claim in Your Tax Return: Remember to claim the tax offset at the relevant section when you lodge your own tax return.

8. Review and Claim Private Health Insurance Rebates

Holding private health insurance can be a smart financial decision, not just for health coverage but also for its direct impact on your tax position. Australian residents with eligible hospital cover may qualify for the Private Health Insurance (PHI) Rebate, a government contribution designed to make insurance more affordable. This rebate can reduce your tax liability or prevent you from paying the Medicare Levy Surcharge (MLS), an additional levy applied to higher-income earners without appropriate private hospital cover.

Reviewing your policy and rebate entitlement is a crucial step when considering what you should do before 30 June to reduce your tax in Australia, especially for individuals and families on higher incomes.

How It Works in Practice

The PHI Rebate is income-tested and can be claimed in two ways. You can either receive it as a direct reduction on your insurance premiums throughout the year or claim it as a refundable tax offset when you lodge your annual tax return. The primary goal is to avoid the MLS, which is an extra tax of 1% to 1.5% on your income for MLS purposes if your income is above the threshold and you don't have private hospital cover. For a high-income earner, the cost of the MLS can easily exceed the cost of a basic hospital policy.

Key Insight: The Medicare Levy Surcharge is calculated on your 'income for MLS purposes'. This includes your taxable income plus other amounts like reportable superannuation contributions. For high earners, this means super salary sacrificing could push you over an MLS threshold, making private health cover even more financially sensible.

Actionable Tips Before 30 June

• Assess Your MLS Risk: Calculate your potential MLS liability based on your estimated income. If the surcharge is greater than the cost of a basic hospital policy, taking out cover before 30 June is a clear tax-saving move.

• Verify Your Rebate Entitlement: Check the income thresholds for the PHI Rebate. If your income has changed during the year, you may need to adjust the rebate amount you claim through your insurer to avoid a debt or receive a larger refund on your tax return.

• Confirm Your Policy Details: Ensure your private health insurer provides you with an annual statement. You will need the details from this statement to complete your tax return accurately.

• Take Out Cover if Needed: If you are a high-income earner without cover, purchasing an appropriate hospital policy before 30 June will exempt you from the MLS for the period you hold the cover.

9. Optimize Division 7A Loans for Shareholder Payments

For directors of private companies, managing how profits are drawn from the business is a critical tax planning area. Division 7A of the tax act ensures that payments, loans, or forgiven debts from a private company to its shareholders are treated as assessable income. However, structuring these as compliant Division 7A loans before the company's lodgment date allows for a tax-effective method of accessing company funds without triggering a deemed dividend.

By formalising these transactions as loans with specific terms, you can manage personal cash flow while the profits remain taxed at the company rate. This strategy is a cornerstone for what you should do before 30 June to reduce your tax in Australia if you operate through a private company structure.

How It Works in Practice

When a shareholder or their associate receives a payment or loan from their private company, it must be repaid or put under a complying loan agreement by the company's lodgment day for that income year. To manage this proactively, a written agreement should be established. This agreement must specify the loan amount, the term, and require at least the minimum yearly repayment of principal and interest.

Key Insight: The interest rate for Division 7A loans is not optional; it is set by the ATO benchmark interest rate for the relevant year. Failing to charge this rate or document the loan correctly can result in the entire loan amount being treated as an unfranked dividend, creating a significant tax liability.

Actionable Tips Before 30 June

• Formalise Agreements: Ensure any funds taken from the company are documented in a written and signed Division 7A loan agreement. This must be in place before the company's tax return is due to be lodged.

• Calculate Interest: The loan must charge interest at or above the benchmark interest rate for the year. This interest is income to the company.

• Make Minimum Repayments: The borrower must make the required minimum yearly repayment of principal and interest by 30 June each year for the life of the loan.

• Review Past Loans: Check the status of any existing Division 7A loans to ensure repayments are up to date and compliant.

10. Claim Small Business Entity Concessions and CGT Rollovers

For qualifying Small Business Entities (SBEs), accessing the range of available concessions is a powerful way to manage tax obligations before 30 June. These concessions are designed to reduce compliance costs and tax liability for smaller enterprises. They include benefits such as simplified depreciation rules, the Small Business Income Tax Offset, and significant capital gains tax (CGT) relief when selling business assets.

Understanding what you should do before 30 June to reduce your tax in Australia as a business owner often starts with confirming your SBE status. Eligibility unlocks immediate benefits and strategic long-term advantages.

How It Works in Practice

A business qualifies as an SBE if it has an aggregated turnover of less than $10 million. Once eligibility is confirmed, the business can apply a suite of concessions. For instance, a contractor might use the SBE rollover relief to sell old equipment and reinvest the proceeds into new machinery, deferring the CGT liability.

Key Insight: The CGT concessions are particularly valuable but require careful planning. To access the rollover relief, the proceeds from a sold asset must be reinvested into a replacement asset within a specific timeframe, making pre-30 June planning essential.

Actionable Tips Before 30 June

• Confirm SBE Status: Review your aggregated turnover for the financial year to ensure it does not exceed the $10 million threshold before making any claims.

• Plan Asset Sales: If you are considering selling business assets, structure the sale before 30 June to take advantage of CGT rollover relief and document your intention to reinvest the proceeds.

• Document Depreciation: If using the simplified depreciation rules, ensure all asset purchases and disposals are correctly recorded to maximise your deductions for the year.

• Claim the Offset: The Small Business Income Tax Offset is generally calculated automatically when you lodge your tax return, but you must ensure your business income is correctly reported.

• Maintain Records: Keep detailed records of any reinvested proceeds from asset sales to substantiate claims for CGT discounts or rollover relief in case of an ATO review.

Pre‑June 30 Tax-Reduction Strategies Compared

Strategy	Implementation Complexity	Ideal Use Cases	Key Advantage
Maximise Superannuation Contributions	Moderate	High-income earners, self-employed	Immediate tax deduction
Prepare Work-Related Expense Claims	Low-Moderate	Employees, contractors with expenses	Broad range of deductible items
Utilise Capital Losses	Moderate-High	Investors with realised capital gains	Direct CGT reduction
Accelerate Business Expense Claims	Moderate	Small businesses, sole traders	Direct deductions, timing control
Manage Rental Property Deductions	Moderate	Property investors and landlords	Negative gearing flexibility
Optimise Trust Distributions	High	Family businesses, investment trusts	Flexible income allocation
Claim Spousal Super Contributions	Low	Couples with income disparity	Direct tax offset ($540 cap)
Review Private Health Insurance	Low-Moderate	High-income earners	Mitigates Medicare Levy Surcharge
Optimise Division 7A Loans	High	Directors of private companies	Tax-effective profit extraction
Claim Small Business Concessions	Moderate-High	Businesses with < $10M turnover	Substantial CGT relief, offsets

ASCII Diagram: Tax Planning Workflow

Here is a simplified workflow for pre-30 June tax planning:

[Start: May/Early June]
      |
      V
[Review Income & Investments] -> [Estimate Taxable Income]
      |                                    |
      V                                    V
[Gather Expense Records] -> [Calculate Potential Deductions]
      |                                    |
      V                                    V
[Assess Capital Gains/Losses] -> [Identify Tax-Reduction Strategies]
      |                                    |
      |                                    V
[Consult Tax Professional] <- [Execute Strategy (e.g., Super, Purchases)]
      |
      V
[Finalise Actions Before 30 June Cut-off]
      |
      V
[Prepare for Tax Lodgment]
      |
      V
[End]

Summary

This section provides a structured overview of key considerations for end-of-financial-year tax planning.

Key Compliance Requirements:

• Documentation: All claims must be substantiated with valid records such as invoices, receipts, and logbooks.

• Trust Resolutions: Distributions for discretionary trusts must be legally documented by 30 June.

• Superannuation Contributions: Concessional contributions must be received by the super fund by 30 June.

• Division 7A Loans: Minimum yearly repayments on existing loans must be made by 30 June.

Confirmed Deadlines:

• 30 June: Last day for transactions, super contributions, and trust resolutions to be effective for the financial year.

Risk Areas:

• Wash Sales: Realising a capital loss by selling and immediately repurchasing a similar asset may be disallowed by the ATO.

• Repair vs. Improvement: Incorrectly categorising rental property expenditure can lead to incorrect claims.

• Failed Trust Resolutions: Not making a valid distribution resolution by 30 June can result in the trustee being taxed at the highest marginal rate.

Brisbane-Relevant Considerations:

• Property Investors: Owners of investment properties in Brisbane should ensure they have accounted for all relevant expenses, including land tax, council rates, and water charges, which can be significant.

• Small Business Owners: The diverse small business landscape in Brisbane means many operators may be eligible for SBE concessions, which should be reviewed annually.

The information provided in this article is general in nature and serves as an educational guide. It does not constitute financial or tax advice and has not taken into account your personal objectives, financial situation, or needs. Tax laws are complex and their application can vary significantly depending on individual circumstances.

For these reasons, it is important to seek professional advice from a qualified tax agent or financial adviser before making any decisions. A professional can help you understand how the rules apply to your specific situation and ensure that any strategies you implement are compliant and appropriate for your long-term goals.

• Australian Taxation Office (ATO) information on Deductions you can claim.

Official ATO Reference

For detailed information directly from the source on key topics covered, please refer to the Australian Taxation Office.

• ATO Official Link: Growing your super

• ATO Official Link: Deductions for small business

FAQs

1. When is the absolute deadline for making a super contribution for it to count? The contribution must be received and credited by your superannuation fund's bank account on or before 30 June. Initiating a transfer on 30 June is often too late due to bank processing times. It is advisable to act at least one week prior to the deadline.

2. Can I claim home office expenses if I only work from home occasionally? Yes, you can claim deductions for the hours you work from home. For FY 2025–26, you can use the ATO's fixed rate method of 67 cents per hour, which covers costs like electricity, gas, internet, and stationery. You must keep a record of the total number of hours you worked from home.

3. What happens if I sell shares for a loss but buy them back a week later? This is likely to be considered a 'wash sale' by the ATO. If the ATO determines that your primary intention for selling and repurchasing the shares was to generate a tax loss, they may cancel the capital loss claim.

4. Is it better to claim the Private Health Insurance Rebate on my premiums or in my tax return? This depends on your cash flow and income certainty. Claiming it on your premiums reduces your regular out-of-pocket expenses. Claiming it on your tax return can result in a larger refund if your income ends up being lower than anticipated, but requires you to pay the full premium upfront.

5. As a small business owner in Brisbane, can I prepay my rent for July to claim it as a deduction now? Yes, small business entities can generally claim an immediate deduction for certain prepaid expenses that cover a period of 12 months or less, ending in the next financial year. This can include expenses like rent, insurance, or subscriptions.

Baron Tax & Accounting Website: https://www.baronaccounting.com Email: info@baronaccounting.com Phone: +61 1300 087 213 Whatsapp: 0450 468 318