Tax Time: 5 Legal Tips to Reduce Tax in Australia
Jun 09, 2025
By Molly Benjamin, Founder of Ladies Finance Club
Listen to the full podcast here.
Tax season doesn’t have to be scary, or expensive. In this episode of Get Rich, Molly Benjamin is joined by Diana Todd, tax expert and founder of Balanced Tax Accountants, to share smart and legal ways to save on your tax bill. Whether you’re an employee, side hustler, or property investor, there’s something in here for you.
Understanding the Australian Tax System: A Quick Guide
The Australian tax system operates on a progressive scale, meaning the more you earn, the more you’re taxed. Income from wages, investments, and businesses all count, and this money goes toward funding essential public services.
Commonly Missed Tax Deductions That Could Save You Money
One deduction people often forget? Handbags used for work. Yes, if you carry your laptop or work materials, you may be able to claim it. Another big tip: keep records of all eligible expenses—whether in a shoebox or a digital folder.
Tax Filing Deadlines in Australia: What You Need to Know
The financial year runs from July 1 to June 30. If you’re lodging your tax return yourself, you must submit it by October 31. Use a tax agent and you’ll generally get an extension until May the following year.
Side Hustles vs. Hobbies: What the ATO Looks For
Have a hobby that’s making money? If you're consistently seeking customers and keeping financial records, it’s likely a business, and the ATO expects it to be reported as one. Bonus tip: if your side hustle earns over $20,000, you can start using its losses to offset other income.
Choosing the Right Business Structure in Australia
Starting out as a sole trader is the easiest option and usually the first step. Once you're earning over $100K in net profit, it might be time to consider registering a company, which has a flat tax rate of 25% and its own tax return requirements.
How Much to Set Aside for Tax From Your Side Hustle
The golden rule? Set aside 30% of your net profit (sales minus expenses) if you're not paying PAYG. This will help cover your income tax and any other obligations that come up.
Claiming Home Office Expenses: Your Options
Working from home? You can either use the ATO’s cents-per-hour method or calculate actual expenses based on the space you use. Track your hours and keep receipts for internet, electricity, and office supplies.
Lowering Your Taxable Income: Super Contributions and More
Extra contributions to your superannuation are one way to reduce taxable income. Just make sure to complete a Notice of Intent form and ensure the payment clears before June 30.
Why Investment Properties Can Be Tax-Effective in Australia
Properties that cost more to maintain than they earn are considered negatively geared and can offset other taxable income. Don’t forget to claim expenses like maintenance, insurance, and depreciation (get a depreciation schedule from a quantity surveyor).
Capital Gains Tax Tips: Save More When You Sell
Hold your shares or property for over 12 months and you could reduce your capital gains tax by 50%. Also, keep clear records of your purchase price, including fees and brokerage.
Medicare Levy and Medicare Levy Surcharge Explained
Everyone earning above a certain threshold pays the 2% Medicare levy. Earn more and don’t have private health insurance? You could also face the Medicare Levy Surcharge—unless you get basic hospital cover. Grab a free independent review with Choicey here.
What You Need to Know About HECS Debt and Tax Returns
Once you earn over $54,435 you must start repaying your HECS debt via your tax return. These payments increase as your income rises, so it’s important to be prepared come tax time.
The takeaway? Don’t let taxes stop you from building wealth. Understand your obligations, track your expenses, and educate yourself on the many ways to legally reduce your tax. And when in doubt, get advice from a pro.
Looking for more money tips? Subscribe to Get Rich and follow Diana Todd at Balanced Tax Accountants for expert guidance.
