Are You Tax Ready for 2025?

Another financial year has wrapped up, and now you’re staring down tax time again. Maybe you’re wondering whether you’ve kept enough receipts, whether you can claim your work-from-home expenses, or whether that side hustle from earlier in the year needs to be included.

Here’s the real question: Are you actually ready to lodge your tax return this year?

If your gut says “not quite,” you’re not alone. Many people put it off, thinking they’ll figure it out when they get to it. But putting off your tax return, or rushing through it without the right info, can cost you, not just in missed deductions, but in potential penalties or unexpected tax bills.

So let’s run through what you really need to know for tax time 2025, and how you can take control now rather than deal with a headache later.

Hoping for the best isn’t a plan.

If your strategy is “I’ll just sort it out when I get to it,” that’s a gamble. Tax rules change. Your situation changes. A year that seemed straightforward on the surface could come with hidden tax consequences.

Lodging your return without the right info, or too early before your income is pre-filled, can lead to mistakes, delays, or under-claiming deductions you’re entitled to.

A little preparation now can save you a lot of back-and-forth later.

What should you do before lodging?

Here’s a quick checklist to get your ducks in a row:

• Link your myGov account to the ATO if you haven’t already. You’ll need your TFN to do this.

• Locate your TFN. If it’s not on hand, check old payment summaries or super statements.

• Wait for pre-fill. The ATO starts filling in income and other details from late July. Lodging before then increases the risk of missing information.

• Mark your deadline. If you’re lodging on your own, you’ve got until 31 October. If you want to use a tax agent, make sure they’re registered and reach out to them before that same date.

Do you need to lodge at all?

Most people do, but not everyone. If your income was low or you only received government payments, you might not need to lodge a return at all.

Still, if you’re unsure, don’t guess. The ATO offers a tool to check. And if it turns out you don’t need to lodge, you’ll still need to submit a non-lodgment form. Ignoring it altogether could still cause issues later on.

Let’s talk deductions.

This is where a lot of people trip up. You can’t just claim everything you’ve paid for. You can only deduct expenses if:

• You paid the money yourself (and weren’t reimbursed)

• It directly relates to your income

• You’ve got proper records—receipts, not just bank statements

If you worked from home this financial year, you may also be eligible to claim part of your electricity, internet, and office equipment expenses. But again, solid records are key.

The Medicare levy and surcharge: what’s the difference?

Most Australians pay a 2% Medicare levy. It helps fund the public health system.

On top of that, higher-income earners who don’t have private hospital cover could also be charged the Medicare levy surcharge. And even if you do have cover, it has to meet the right requirements. If your spouse or children weren’t included in the policy, or you only had it for part of the year, you could still be charged.

It’s worth checking the fine print so you’re not caught out.

Got a student loan?

If your income is over the repayment threshold, you’ll need to start paying it back, even if you’re still studying.

Your employer might already be withholding extra from your pay, but it doesn’t go toward your loan until after you lodge your return. If they withheld too much, you could get a refund. If they didn’t withhold enough, you might have a shortfall.

Letting your employer know you have a loan can help avoid issues in the future.

Don’t forget your spouse’s details.

You need to include your partner’s income on your return if you had a spouse at any point during the financial year. This includes married, de facto, or domestic relationships.

The ATO uses combined income to determine eligibility for certain offsets and rebates, and to calculate the Medicare levy surcharge. Leaving it out could mean losing out on entitlements—or worse, ending up with a bill later.

What if something goes wrong?

Made a mistake? Don’t panic. Wait for your notice of assessment, then lodge an amendment. Doing it too early can slow things down.

Got a bill? The due date is 21 November, no matter when you lodge. Can’t pay it all at once? You may be able to set up a payment plan, but you’ll need to act quickly to avoid interest charges.

So, are you actually tax-ready?

Ask yourself:

• Have I waited until all my income info is pre-filled?

• Am I confident in the deductions I’m claiming?

• Have I included all my income, including freelance, cash jobs, or investments?

• Have I checked my Medicare levy or surcharge status?

• Did I include my partner’s details?

If any of those questions made you pause, it might be time to get help.

Here’s where Clear Tax comes in.

At Clear Tax, we know tax season can be confusing, stressful, and—let’s be honest—not something most people look forward to.

But it doesn’t have to be that way.

We work with individuals, sole traders, and small businesses across Australia to take the guesswork out of tax. Whether it’s lodging your return, claiming all the deductions you’re entitled to, or sorting out a past mistake, we make it easier.

We speak your language, not accounting jargon. And we make sure nothing slips through the cracks—because even small oversights can lead to big problems down the line.

Want to get your 2025 tax return sorted the right way?

Reach out to Clear Tax today and take the pressure off. We’re here to make tax time simple, clear, and stress-free.

📚 Curious to know more? Dive into our blogs and get simple, practical tips straight from the experts!

1. What Is the Time Limit for Tax Return Amendments to the ATO?

2. Hiring a Tax Accountant vs Doing Your Own Tax Return

3. Why Ignoring a Tax Return Error Could Cost You

Do You Need to Declare Foreign Income in Australia?

 If you're earning money from overseas and not telling the ATO, you're playing with fire.

This isn’t just something that affects CEOs or world travellers. It’s about you. Whether you’re freelancing for a client in the US, earning rental income from a property in Europe, or dabbling in international shares, it all counts. 

And if that foreign income isn’t showing up on your tax return, the ATO sees that as a problem. A serious one.

You might think it’s small, or that no one’s going to notice. But the truth is, they do notice, and not reporting it could land you with penalties you didn’t see coming. So, before you file and forget, let’s talk about what foreign income actually means and why ignoring it isn’t worth the risk.

What Is Considered Foreign Income?

Foreign income isn’t just some niche tax category. It’s any income you earn from sources outside Australia. This can include:

• Working remotely for an overseas company

• Getting paid by international clients for freelance work

• Earning dividends from foreign shares

• Collecting rent from a property abroad

• Even receiving a pension or benefit from a foreign government

If you’re thinking, “But I wasn’t in another country,” that doesn’t matter. It’s not about where you physically were, it’s about where the money came from.

Who Must Declare Foreign Income?

Yes. You absolutely do.

As long as you are considered an Australian resident for tax purposes, you must report all income, no matter where in the world you earned it. There is no lower limit or hidden loophole. Whether it’s $50 or $50,000, it needs to go on your tax return.

You might not feel like a global earner, but the ATO doesn’t see it that way.

ATO Rules for Tax on Overseas Income

The simple answer? It’s about fairness and transparency.

The ATO wants everyone to be taxed according to their total income, no matter where it came from. If you’re benefiting from services and infrastructure in Australia, the government expects a fair contribution.

Plus, Australia has tax treaties with a bunch of other countries. These agreements help you avoid paying tax twice on the same income. But there’s a catch: to get those tax credits or offsets, you have to declare the foreign income first.

So in a way, reporting that income could actually save you money, if you play by the rules.

Want to Learn More? Check Out These Sections on Our Website

We’ve only scratched the surface here. If you’re wondering how to actually go about declaring your foreign income or want to avoid the most common mistakes, we’ve got the full guide for you:

How to Report Foreign Income: Step-by-step instructions to make sure you’re doing it right.

Common Mistakes to Avoid: Learn from the errors others have made so you don’t have to.

To read the full blog and get all the essential info, head to our website [https://cleartax.com.au/tax/personal-tax/declare-foreign-income/] and get the details that could save you from an expensive mistake.

Final Word

If you’ve got income coming in from overseas, even just a trickle, you need to take it seriously. The ATO doesn’t care how small or whether it was “just a one-time payment.” If it’s income and you’re a tax resident here, it needs to be reported.

Don’t leave it to chance. Get informed, get prepared, and make sure you’re ticking all the right boxes.

Got foreign income? Make it your business to declare it, because the ATO already considers it theirs.

Ready to dive deeper?

Read the complete blog on our website here:

https://cleartax.com.au/tax/personal-tax/declare-foreign-income/

https://cleartax.com.au/tax/business/starting-a-business/

https://cleartax.com.au/tax/business-tax/are-you-ready-for-gst/

Tax Rates for Australian Residents

We all know how tough the cost of living has been in Australia lately. But here’s a bit of good news: the Australian Taxation Office (ATO) has updated tax rates and brackets for the 2024-2025 financial year. 

These changes are designed to ease the financial pressure on Aussies by reducing tax rates and increasing tax brackets. 

So, what does this mean for you? Let’s break it down.

What Are Tax Brackets, and Why Should You Care?

If you’re unsure about what tax brackets are, don’t worry—you’re not alone. 

Simply put, tax brackets are income ranges where different tax rates apply. As your income goes up, the percentage of tax you pay also increases. But here’s the catch: you don’t pay the highest rate on your entire income. Instead, you pay the applicable rate for each portion of your income that falls within a given bracket.

For example, if you earn $50,000, you won’t pay the highest tax rate on all $50,000. Instead, you’ll pay different rates on different portions of your income, depending on which bracket they fall into. Simple, right?

The 2024-2025 Tax Rate Changes

From July 1, 2024, you’ll notice some key changes in the tax brackets. Here’s the lowdown:

• 19% tax rate reduces to 16%

• 32.5% tax rate reduces to 30%

• 37% tax threshold increases from $120,000 to $135,000

• 45% tax threshold increases from $180,000 to $190,000

So, for most taxpayers, the changes mean you’ll be taxed at a lower rate for more of your income. That’s more money in your pocket to handle your everyday expenses, save, or even splurge a little.

Here’s What the New Tax Brackets Look Like:

• $0 – $18,200: 0%

• $18,201 – $45,000: 16%

• $45,001 – $135,000: 30%

• $135,001 – $190,000: 37%

• $190,001 and over: 45%

These changes are set to benefit millions of Australians, especially those in the middle-income brackets. You’ll see more of your hard-earned cash staying in your pocket—just where it should be.

What Does This Mean for You?

Let’s put this into perspective. Imagine you’re currently earning around $50,000 a year. With the new tax rates, you’ll pay a reduced rate on a larger portion of your income. This means you’ll end up with more money in your hand after taxes. 

That’s less stress about monthly bills, more flexibility with your spending, and maybe even a bit of breathing room to start saving for a rainy day.

Of course, this is just one example. Depending on your income, the changes could mean a significant reduction in the amount of tax you owe each year. But it’s important to note that these changes don’t apply to all income—if you're a high earner, the highest tax rates still kick in once you surpass $190,000.

Keep in Mind: It’s Not Just About the Tax Rate

While the changes to tax brackets are a welcome relief, remember that these rates don't account for the Medicare levy (2%) or any potential Medicare levy surcharges you might owe. And if you’re a resident taxpayer, you’re eligible for these rates only if you're an Australian resident for the full financial year and entitled to the full tax-free threshold.

So, while these tax rate cuts are great, it’s essential to keep your overall tax obligations in mind.

How Can You Maximise Your Tax Savings?

There’s more to your tax return than just rates. Deductions can also play a big role in lowering your taxable income. From work-related expenses to donations, personal super contributions, and investment costs, deductions help you reduce the income that’s taxed. This, in turn, reduces the overall tax you owe.

But here’s the thing: tax deductions can get a bit tricky. Are you eligible? Do you have the right records? If you’re unsure, it might be a good idea to get some expert advice. A tax professional can guide you through the process and help you claim every deduction you're entitled to. 

At Clear Tax Accountants, we’ve helped countless clients navigate their tax obligations and save a significant amount on their taxes.

Keep exploring — dive into more of our blogs for valuable insights!

Avoid These Common (Capital Gains Tax) CGT Errors
Is Your Super in Good Shape? Here’s Why You Need to Check
How Much Will You Save with the New Tax Cuts?
Record-Keeping for Not-for-Profits

4 Key Questions to Ask Before Hiring a Property Accountant

Let’s be real—property investment isn’t just about buying and selling real estate. It’s about strategy, smart tax planning, and maximising your returns. And that’s exactly why having the right property accountant is crucial.

But here’s the problem: not all accountants understand property investment. If you choose the wrong one, you could miss out on thousands in deductions, pay more tax than necessary, or make costly financial mistakes.

So, before you hire a property accountant in Australia, ask these four key questions to make sure they’re the right fit.

1. Do You Specialise in Property Investment?

This might seem like a no-brainer, but many investors assume all accountants understand property tax. The truth? Many general accountants only handle basic tax returns and business finances. They don’t necessarily have expertise in property-specific tax strategies.

Would you want someone with no experience in property investment handling your financial future? Probably not.

A great property accountant should know the ins and outs of capital gains tax, depreciation, negative gearing, and tax-effective property structures. Without this knowledge, they could be costing you money rather than saving it.

Ask them how many property investors they work with. Do they actively help clients structure their portfolios for tax efficiency? Can they provide real-life examples of how they’ve saved investors money? Their answers will tell you whether they truly understand property investment.

2. What Strategies Do You Use to Minimise Tax?

Paying tax is unavoidable, but overpaying is. The right accountant won’t just lodge your tax return; they’ll actively work to reduce your tax liability in legal and strategic ways.

So, ask them: What strategies do they use to maximise deductions? Can they help you claim depreciation on your investment properties? Do they understand how to offset rental losses against other income?

A proactive property accountant should be able to explain how they can help you lower your taxable income through smart structuring and planning. If their answers are vague or they only focus on compliance, they might not be thinking strategically enough.

3. How Do You Stay Updated on Property Tax Law Changes?

Australian tax laws are constantly evolving. What worked last year might not be effective this year. That’s why it’s critical to have an accountant who stays ahead of these changes.

Ask them: How do they keep up with updates in property tax laws? Do they attend industry seminars? Are they part of professional tax organisations? Do they follow ATO updates and property tax reforms?

An accountant who doesn’t stay informed could be missing out on new deductions, grants, or tax-saving opportunities. And if they’re not up to date, you could be the one paying the price.

4. Can You Help Me Plan for the Future?

Property investment is a long-term game. It’s not just about managing tax each year—it’s about creating wealth over time. The best property accountants don’t just look at the present; they help you build a strategy for the future.

So, ask them: Can they help you structure your portfolio for long-term growth? Do they offer advice on asset protection? Can they guide you on the best way to sell or transfer your properties in a tax-efficient way?

If an accountant only focuses on short-term tax returns without considering your broader investment goals, they may not be the right fit. You need someone who sees the bigger picture and helps you make strategic financial decisions.

The Bottom Line

Choosing a property accountant in Melbourne isn’t a decision to take lightly. The right one can save you thousands, protect your investments, and help you grow your portfolio. The wrong one? They could leave you overpaying tax and missing out on key financial opportunities.

Before making your choice, ask these four key questions. Their answers will reveal whether they’re the expert you need to maximise your property investments—or just another accountant who doesn’t fully understand the game.

Your investments deserve more than just basic number-crunching. Find an accountant who will help you build wealth, not just file your tax return.

How to Save Money with the Right Accountant?

Let’s be real—no one likes to pay more tax than necessary. Yet, every year, thousands of Australians do just that. Not because they are careless but because they are missing one crucial piece of the puzzle: the right accountant.

Think about it—when was the last time you sat down and truly analysed your business expenses, tax deductions, and financial strategies? If you’re like most business owners, you’re probably too busy juggling day-to-day operations to focus on the finer details of tax planning and cash flow management.

Here’s the hard truth: without a skilled accountant on your side, you’re likely leaving money on the table. And in today’s economy, every dollar counts.

So, how exactly can the right accountant help you save money? Let’s break it down.

1. Strategic Tax Planning – Keep More of What You Earn

Nobody wants to overpay on taxes, yet many businesses and individuals do simply because they don’t have the right strategy in place. A good accountant does more than just lodge your tax return—they actively look for ways to minimise your tax liability within the legal framework.

How does tax planning save you money?

Maximising Deductions: Are you claiming every deduction available to you? Many business owners overlook legitimate deductions that could significantly reduce their taxable income.

Tax Structuring: The right business structure—whether it’s a sole trader, partnership, company, or trust—can impact how much tax you pay. A knowledgeable accountant will ensure you’re set up in the most tax-efficient way.

Avoiding Penalties: Late or incorrect lodgements can lead to hefty fines from the ATO. Having an accountant ensures compliance and avoids unnecessary penalties.

2. Cash Flow Management – Never Run Out of Money Again

Ever felt like you’re making decent revenue but somehow never have enough cash when you need it? Poor cash flow management is one of the biggest reasons businesses struggle financially—even profitable ones.

A great accountant won’t just tell you how much money you’re making; they’ll show you where it’s going and how to keep more of it.

How can a tax accountant in Australia help with cash flow?

Forecasting & Budgeting: They help you anticipate future cash needs so you’re not caught off guard by unexpected expenses.

Expense Tracking: Identifying wasteful spending can free up significant funds. You’d be surprised how much money leaks through unnecessary costs.

Debt Management: If your business relies on loans or credit, an accountant can help you structure repayments efficiently to avoid excessive interest payments.

3. Financial Modelling & Forecasting – Plan for Growth, Not Just Survival

Do you know where your business will be in five years? Or are you just taking things as they come? Without a clear financial roadmap, you could be making decisions that hurt your long-term profitability.

A skilled accountant can create financial models that show different scenarios—what happens if you expand, increase prices, or cut costs? These insights help you make informed decisions rather than just guessing.

Why does this matter?

Helps identify potential risks before they become problems.

Ensures your business is financially sustainable, not just operational.

Gives you clarity on whether an investment or expansion is the right move.

4. Cost Control – Stop Wasting Money

If you don’t actively track your expenses, chances are you’re spending more than you should. It’s easy to justify small costs here and there, but over time, they add up.

An accountant helps you identify areas where you can cut costs without sacrificing efficiency.

Where can an accountant help you save?

Supplier & Vendor Costs: Are you overpaying for services? An accountant can analyse contracts and suggest renegotiations.

Operational Expenses: From rent to subscriptions, they help you eliminate wasteful spending.

Payroll Optimisation: Ensuring your staff costs are balanced with business revenue to avoid unnecessary financial strain.

5. Business Structuring – Set Yourself Up for Success

Your business structure isn’t just a legal formality—it directly affects your tax obligations, liability, and financial flexibility. The right structure can save you thousands in tax, while the wrong one can lead to financial inefficiencies and unnecessary expenses.

How does structuring impact your savings?

Lower Tax Rates: Companies and trusts often have lower tax rates than sole traders, depending on income levels.

Asset Protection: The right structure protects your personal assets from business risks.

Flexibility for Growth: Some structures make it easier to bring in investors or expand operations.

6. Do You Need an Accountant Even If You Use Accounting Software?

You might think, "I use Xero or MYOB—why would I need an accountant?"

Sure, accounting software makes tracking numbers easier, but it doesn’t replace expert advice. Software can’t provide tax strategies, analyse financial trends, or find ways to cut costs.

How to Choose the Right Accountant for Maximum Savings

Not all accountants are created equal. If you want real financial benefits, you need someone who does more than just file paperwork. Here’s what to look for:

Experience in Your Industry: Different businesses have different financial needs—find someone who understands yours.

Proactive Approach: The best accountants don’t just react to financial issues; they help you prevent them.

Strong Tax Knowledge: Tax laws change frequently—your accountant should be on top of every opportunity to save you money.

Clear Communication: If they confuse you with jargon, they’re not the right fit. Your accountant should simplify financial matters, not complicate them.

The Bottom Line – Is Your Accountant Saving You Money?

If your accountant isn’t actively helping you keep more money in your business or personal finances, you’re with the wrong one. The right accountant doesn’t cost you money—they save you money.

So, ask yourself:

Are you overpaying on tax?

Do you have a solid cash flow plan?

Are you making strategic financial decisions backed by expert advice?

If the answer to any of these is no, it’s time to find an accountant who will help you change that. Because in business, every dollar saved is a dollar earned.

What Is a Personal Services Business (PSB), and Is Your Business One?

Picture this: you’ve worked tirelessly to build your business, secured steady clients, and are starting to see the financial rewards. But then tax season rolls around, and suddenly, you’re faced with a pile of rules you don’t quite understand.

Could your business be classified as a Personal Services Business (PSB)?

If so, it changes the game.

Many Australian entrepreneurs unknowingly make mistakes here, costing them money, time, and peace of mind. So, how do you know if your business qualifies? And what should you do about it? Let’s dive into the details.

What Is a Personal Services Business (PSB)?

Think of a PSB as a business where most of the money you make comes from your personal skills, labour, or expertise. In other words, if over 50% of what you’re paid for a contract is due to you—not the materials, tools, or other resources you provide—then you might be operating as a PSB.

But it doesn’t stop there. To officially qualify as a PSB, your business also needs to pass at least one of the Personal Services Income (PSI) tests. Confused? Don’t worry, here’s a quick rundown:

The Results Test

• Are you paid to deliver a specific result?
• Do you provide your own equipment or tools?
• Are you responsible for fixing mistakes at your own cost?

If you answered “yes” to these questions, congratulations! You’ve passed the Results Test.

The 80% Rule

Does more than 80% of your income come from one client? If yes, you need to dig deeper into the other tests to see if your business qualifies as a PSB.

The Other Tests (Pass at Least One)

Unrelated Clients Test: You work with multiple unrelated clients.

Employment Test: You employ others to do a significant portion of the work.

Business Premises Test: You operate from a dedicated business location separate from your home.

Why Does It Matter If You’re a PSB?

Here’s the good news: being a PSB means you’re entitled to the same tax deductions as any other business. From claiming a portion of your home office expenses to paying a family member for admin tasks, the benefits are substantial.

However, there are some important rules to keep in mind:

• Any profits made by the business must be paid to you as wages, directors’ fees, or bonuses. This means you can’t stash profits in a company to take advantage of lower tax rates or distribute them to family members via a trust.

Ignoring these rules can lead to issues with the Australian Taxation Office (ATO), and no one wants that, right?

Is Your Business a PSB?

Let’s say you’re a freelance IT consultant. You’ve just scored a big contract with a major company, and they’re paying you to develop a custom software solution. You provide the code, but they supply all the hardware and office space.

In this case, you might not pass the Results Test, as you’re not providing your own tools or taking on the risk of fixing mistakes. You’d need to assess the other tests to determine whether your business is a PSB.

Now, imagine you’re a self-employed accountant who is working from home. Most of your income comes from preparing tax returns, and you use your own computer, printer, and software. You’re paid for delivering a specific outcome—completed tax returns—and if there’s an error, you’re responsible for fixing it.

You would likely pass the Results Test, making your business a PSB.

What If Your Business Isn’t a PSB?

If your business doesn’t qualify as a PSB, the rules are stricter. The ATO might limit your tax deductions, and you’ll need to include all income as personal earnings. This could lead to higher taxes if you’re not careful about structuring your finances.

Common PSB Industries

Not sure if this applies to you? PSBs are common in industries like:

• IT Consulting
• Engineering
• Legal and financial services
• Medical professions
• Construction and trades

If you operate in one of these fields, it’s worth digging into whether your business structure is right for your situation.

What Should You Do Next?

Still unsure if your business qualifies as a PSB? Here’s your action plan:

• Review the PSI Tests: Check whether your business meets the criteria.
• Consult a Tax Professional: An expert can help you determine the best structure and ensure you’re compliant with ATO rules.
• Take Control of Your Taxes: Make sure you’re not overpaying by claiming all deductions you’re entitled to.

Final Thoughts

Running your own business is a big deal, and the last thing you want is to be blindsided by tax complications. By taking a closer look at your business structure and understanding what it means to operate as a Personal Services Business, you’re setting yourself up for success.

So, ask yourself: Is my business a PSB? If the answer isn’t clear, it’s time to find out. After all, the more you know, the better equipped you’ll be to make the right decisions for your financial future.

 

Disclaimer: This website is designed for informational and educational purposes. Although we exert diligent efforts to maintain the accuracy and reliability of the content, we must disclaim liability for any errors, omissions, or inaccuracies. The content provided is “as is” and is not accompanied by warranties, whether expressed or implied. It should not serve as the sole basis for financial or legal decisions.

Given the evolving nature of financial regulations and conditions, the accuracy and reliability of information may change over time. Users are urged to exercise due diligence and consult with a qualified financial professional for personalised advice. ‘Clear Tax Accountants’ bears no responsibility for direct or indirect consequences, encompassing financial loss or legal matters stemming from the use or misuse of the information on this website.

Please be aware that the information, by no means, is a substitute for financial advice.