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June 3, 2025 15 mins

The 2024-25 financial year is almost over, which means tax time is just around the corner. So what can taxpayers do to prepare?

On this episode of the Friends With Money podcast, Money’s Tom Watson is joined by Mark Chapman, director of tax communications at H&R Block, to discuss key tax dates, contributions, deductions, documents and more.

00:00 Introduction

00:28 Key dates for the 2025 tax season

03:08 The taxpayers under ATO scrutiny

05:39 Last-minute deductions and contributions

10:41 Preparing for the new financial year

12:15 Upcoming tax changes and final thoughts

#friendswithmoney #tomwatson #markchapman #tax

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.

Speaker 2 (00:12):
Hello and thanks for joining us for another episode of
Friends with Money, money Magazine's podcast to help you earn, save,
and achieve your financial goals. My name is Tom Watson,
a senior journalist here at Money Magazine, and as always,
it is a pleasure to be with you. Twelve point
six million. That is the number of individual tax returns

(00:34):
the Australian Taxation Office, commonly known as the ATO says
it is a received for the twenty twenty three to
twenty four financial year as of late January. And I
know it's hard to believe and frankly some of you
won't want to hear it, but with the end of
the financial year nearly upon us, it is time for
Australian to start thinking about tax again in a serious way.

(00:57):
So with that in mind, on today's episode, we are
going to take a look at some of the things
that tax payers can do before this financial year is
out and once the twenty twenty five to twenty six
financial year begins to prepare for tax time. And joining
us today is a man that always has tax on
his mind. Or actually, I hope that's not true for

(01:18):
yours eight Mac, but it is a regular Money contributor,
friend of the podcast and director of tax communications at
H and R Blog, Mark Chapman. Mark, welcome back to
Friends with Money. It is a pleasure to have you
back on the show.

Speaker 3 (01:30):
No problem, Tom, Thanks very much, It's always a great
pleasure to be here.

Speaker 2 (01:34):
Mark. To start off, just to give everyone a little
bit of context, what are some of the I guess
key tax related dates coming up that Australians will want
to be aware of.

Speaker 3 (01:46):
Well, the main one is coming up to tax time.
Hard to believe it's been a whole year, but nevertheless
we're coming up to the season when people do need
to prepare their tax returns. So as of July the first,
basically the AHO will be open for business for people
twenty twenty five tax returns, so they do need to

(02:07):
lodge those as of July the first, probably best if
they wait a couple of weeks to lodge their tax returns.
You know, if they're relying on pre field data for example,
that's often not available in the early part of the
tax season. So we do recommend that people do lodge
from about you know, the fourteenth of July onwards and

(02:29):
basically they've got until the thirty first of October to
actually lodge. That's the deadline for self lodgers. If they're
using a tax agent, however, they potentially have until the
fifteenth of May next year, so they have a good
long time to actually lodge their return. Obviously, if they're
expecting a refund, as many taxpayers will be doing, we

(02:49):
do recommend that taxpayers lodge sooner rather than later. So
you know, in July and August we expect to get
lots of tax returns producing very large refox.

Speaker 2 (03:01):
Well lots of incentive to are to get organized and
then to get filing early, although as she said, not
too early their mark. Before we get into some kind
of practical things people can do to a to start
to prepare. Are there any groups of taxpayers that the
ANTO has I guess put on notice so far this
year that you know, might get a little bit of

(03:22):
extra close attention this year.

Speaker 3 (03:24):
Yeah, Well, I mean the ato's hit piss as it were,
is pretty similar to last year, so they're going to
be paying close attention to work related expenses. You know,
in terms of those deductions for working for home expenses,
claims for work related clothing, botor vehicle claims, all of

(03:45):
that kind of thing. The ATO estimates that there was
something like an eight point seven billion dollars short for
between the tax and individuals were were expected to pay
and the tax they actually are paying.

Speaker 2 (03:58):
Wow.

Speaker 3 (03:58):
And now the ATO believes that that tax gap is
predominantly related to work related expenses. So the ATO are
inevitably going to have a very large focus on work
related expenses. However, in addition, you know, if you own
a property, you can expect to receive a certain amount
of ATO scrutiny. The ATO recently announced that in a

(04:21):
series of audits they found errors in ninety percent of
return reviewed which were related to properties. So therefore you
can expect them to particularly focus on investment properties, holiday homes,
et cetera. You know, all of those sorts of claims.
And also in relationship of sharing economy, the ATO believes

(04:44):
that there are lots of people who are operating in
the sharing economy, you know, Uber, Airbnb, task et cetera,
all those platforms who simply aren't declaring their income. So
you know, the ATO does have a real focus on
the sharing economy and indeed also on crypto currency. Many
people believe that cryptocurrency provides people with an opportunity to

(05:05):
buy and sell with some degree of anonymity. They believe
that the AHO doesn't know what they're doing. Well, the
HO by and large does know because they're getting third
party data from cryptocurrency exchanges. Therefore, you know, they are
going to have a real focus on people who are investing, buying,
and selling cryptocurrency.

Speaker 2 (05:27):
There's been a lot of people that have been doing that,
especially in the last year or so, so a good
little warning there for them and the other people that
you mentioned their mark. All right, let's get practical. Then,
are there any last minute deductions or contributions that people
may want to consider making now before the end of

(05:50):
the financial year actually comes.

Speaker 3 (05:52):
Yes, well, I mean probably the biggest one is this
does it right off?

Speaker 1 (05:56):
Now?

Speaker 3 (05:56):
That only applies if you're running a small business. So
if you're small business has got a turnover of less
than ten million dollars, as it right off enables you
to write off the cost of all capital purchases up
to a limit of twenty thousand dollars per item. You know,
if you spend the next few weeks purchasing capital items,

(06:18):
you can write off the full cost in this tax year,
provided the cost of the acid is less than twenty
thousand dollars. So this is a really worthwhile scheme. It
was originally expected to end on the thirtieth of June
twenty twenty five, has actually been extended now to the
thirtieth of June twenty twenty six. But nonetheless, in his
current tax here he does provide a grade incentive for

(06:40):
small businesses to do some tax planning, particularly last minute
tax planning around this time of year, So that's only
applicable to small businesses. If you're employed, you know, there
are various other things you can look to do, such
as making a tax deductible super contribution provided to total
amount of your concessional contributions doesn't exceed thirty thousand dollars.

(07:07):
You know, this can be a great way to both
boost your retirement savings and also claim a tax deduction
for the personal contribution. Now that thirty thousand dollars does
include any employer's contributions which have already been paid. Nevertheless,
there might be some some additional contributions you can make
in order to meet that thirty thousand dollars threshold. So

(07:28):
if you can, if you've got some spare cash lying around,
that's well worth looking at.

Speaker 2 (07:33):
Yeah, great point. Always always love the idea of making
extra contribution. If, as you said, do you have the
cash to spare harm, that could be really useful. Mark,
just a bit of a follow up on this one.
How can people ensure that they're actually, you know, claiming
the deductions that they're entitled to without getting in trouble

(07:54):
with the ideo.

Speaker 3 (07:55):
Well, the best plan here is really to get a
tax agent. A good tax agent will be able to
stiff out some additional deductions that you may not have
realized that you're actually titled to. But equally, a good
tax agent will be able to say that no, you
can't actually claim this deduction. So you know, they do

(08:17):
earn their fees in both directions, and of course the
tax agent's fees itself deductible in next year's tax return.

Speaker 2 (08:28):
And still on the kind of pre end of financial
year to do lists or perhaps kind of moving into
a post as well, are there any documents or records
that people may want to start putting together, you know,
to make life easier when they actually start thinking about
preparing their tax return in the months to come.

Speaker 3 (08:48):
Yes, well, in terms of asociation of your deductions, it
is necessary to have all of your invoices or your receipts,
so it is worthwhile spending the time to pull together folder,
either in an electronic form or in paper, for of
all of your receipts to support the deductions you tend

(09:09):
to claim, even if you're not sure whether it's going
to be claimable, you get the receipt or the invoice,
take it along to your tax agent and they will
be able to tell you whether you can claim it
or not. You know, now is a really good time
to do that. Obviously, if you can't find a copy
of the receipt or the invoice, you have the option
of potentially going back to the retailer and obtaining a copy. Otherwise, unfortunately,

(09:35):
you won't really be able to claim a deduction for
at that particular item if you can't substantiate it. So,
in other words, if you can't produce the invoice or
the receipt, there are certain circumstances where you might be
able to get away with the bank statement to a
credit card statement but that isn't guaranteed. So we always
say that an invoice or the receipt is the primary

(09:59):
form of substance. So it is essentially we're going to
tax time, you know, with a comprehensive file of it
voices or receipts for all of our clients.

Speaker 2 (10:10):
Don't know to pat myself on the back too much, year,
but one of my kind of financial New Years or
financial New years the resolutions last year was to to
keep a proper folder in my Gmail and chuck all
my kind of work related expenses and receipts in there.
So I've got a nice tidy folder ready to go

(10:32):
for tax time this year. And I've actually followed that,
So yeah, well done me. I don't know why I
bought that up, but yeah, I think it's a I
think it's a good idea. Anyway, Mike, let's move on
to the new financial year. Then after July one, when
the new financial year begins and people can, as you
said in theory, start to think about the tax returns.

(10:53):
Is there anything they should consider or you know, straight
out shouldn't consider doing to you know, make life easier
or not.

Speaker 3 (11:01):
Well, I mean thinking forward to next year's tax return.
It might seem that we're a long way from that point,
but doing what you did, you know, storing documents as
you go through the course of the year will always
make life easier come tax style. You know, it's all
very well scrabbling around trying to find invoices in June

(11:24):
that relate to you know, last July or August, but
it's so much easier if you've actually had the forethought
to actually pull together all of those invoices at the
time which you spend the money. So therefore it is worthwhile,
you know, preparing a file and actually filling it with
invoices or receipts as you go, rather than trying to

(11:45):
do it all at the last minute in June, when
there's a good chance that you won't be able to
find a receipt for a particular invoice, you know you're
potentially missing out. That is probably the number one key,
you know, think ahead and plan accordingly, and keep your
receipts and invoices as you actually spend the money.

Speaker 2 (12:08):
Follow my advice to your listeners, not that I give
any personal much for financial advice, sid it's only general advice.
Mark a final question for me and with the caveat
that things could, you know, always change between when we're
recording this episode and the start of the new financial year.
But are there any new tax related changes kicking in

(12:29):
from July one that that people may want to know about.

Speaker 3 (12:32):
Yes, well, the rate of the lowest rate of big
tax is actually coming down from the first of July.
That won't be make a huge difference. It'll know about
to about five dollars a week for most taxpayers, so
therefore it'll pay for a cup of coffee. But it's

(12:53):
worth while bearing your mind. But other than that, basically
things are carrying on much as we're expected to the
new financial year. There aren't really any major changes to
the financial system tax system. Obviously, with the caveat that
things can change. With the economic climate the way things
are at the moment, you know, things may well change,
but as we speak today, there aren't really any dramatic

(13:15):
changes to the tax system that people need to be
aware of.

Speaker 2 (13:20):
Well, given the turbulence so we've been witnessing over the
past couple of weeks and even months, I think everyone
would like a little bit of stability, even if that
means nothing too exciting. The on the tacks right in
terms of changes for in July one. Mark, I think
that's probably an excellent place to wrap things up for today.
So thank you so much for joining us as always,

(13:40):
and I'm sure we'll look forward to hearing your voice
on the podcast again very soon.

Speaker 3 (13:46):
It's a pleasure. Thanks Tom.

Speaker 2 (13:48):
And before I forget, if you'd like another quick tax
fix and you haven't listened to it already, can I
recommend our episode with Mark on Inheritance and Tax episode one.
It is a thoroughly engaging episode and it's had a
great response so far, so we very much appreciate everyone
that's given that a listen, and of course Mark himself

(14:10):
for doing such a stellar job on that episode. Anyway,
it is a time for me to stop talking because
that is it for this episode. But don't forget. You
can always jump on our website moneymag dot com dot
au for your daily dose of financial news. We can
go grab yourself a copy of the led edition of
Money Magazine in all good news agents. As always, Friends

(14:30):
of Money will be right back in your podcast for
you next week. So until then, my name is Tom Watson.

Speaker 1 (14:35):
Goodbye for now, thanks for listening to the Friends with Money. Podcast.
For credible, independent, and easy to understand financial commentary, visit
moneymag dot com dot au. Please remember that the views
and opinions expressed in this podcast are general in nature
and further independent advice and research based on your personal

(14:56):
circumstances should be sought before making an in investment decision
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