Tax time arrives every year, and every year the same pattern plays out. Australians either miss deductions they were fully entitled to claim, or include claims without the records to back them up. Both outcomes cost money. The first leaves a refund on the table. The second invites an ATO review.
Our CPA-qualified team at Lodge with P&D Accountants prepares individual tax returns for clients across Australia. The questions we field most often are straightforward: what can I actually claim, and what do I need to keep? This guide answers both.
Who needs to lodge an individual tax return in Australia?
Most Australian residents who received any income during the financial year ending 30 June 2026 are required to lodge a tax return. This covers employees, sole traders, investors, and anyone receiving government payments above the tax-free threshold.
If you genuinely earned below the tax-free threshold and had no tax withheld, you may not need to lodge. The easiest way to confirm your position is to speak with a registered tax agent. Getting that answer wrong can result in penalties for non-lodgement that significantly exceed the cost of professional advice.
The most commonly missed deductions on individual tax returns
Work-related expenses
Employees can claim the cost of expenses directly connected to earning their income, provided those costs were not reimbursed by the employer. Common deductions that are frequently overlooked include:
- Tools and equipment used for work
- Uniforms, protective clothing, and ATO-approved work wear
- Home office running costs under either the fixed rate method or the actual cost method
- Work-related professional development, courses, and industry subscriptions
- Union fees and professional membership dues
For 2025-26, the revised fixed rate for working from home is 70 cents per hour. You must keep a record of actual hours worked, not a rough estimate. The ATO no longer accepts a four-week diary as representative of the full year.
Vehicle and travel
Work-related car travel is deductible using either the cents per kilometre method — currently 88 cents per kilometre for 2025-26 — or the logbook method. Ordinary commuting from home to your usual workplace is not deductible. Travel between two work locations, or from a home office to a client site, generally is.
Investment income and related deductions
If you earned income from shares, managed funds, or interest-bearing accounts, a range of associated expenses may be claimable. These include fees paid for investment advice, interest on money borrowed to acquire income-producing investments, and the cost of tax advice related to your investment portfolio.
What the ATO is targeting in 2025-26
The ATO runs extensive data matching programs. It cross-references your tax return against employer records, bank data, share registries, and property management platforms. For the current year, the ATO has identified the following as priority compliance areas:
- Home office claims submitted without supporting records
- Work expense deductions that are inconsistent with the taxpayer's occupation and industry
- Rental property income and expense discrepancies
- Short-term rental income from platforms such as Airbnb and Stayz that has not been declared
Claiming deductions you cannot substantiate is not worth the risk. The safest approach is to claim every legitimate deduction you are entitled to, keep the records to support each claim, and work with a registered tax agent who understands what the ATO expects from returns in your occupation and income bracket.
Record-keeping: what the ATO requires
The ATO requires written records for five years from the date of lodgement. Records can be digital. For work-related expense claims, you need a receipt or a written record that captures the amount, who was paid, what was purchased, and when.
For vehicle claims using the logbook method, a logbook covering a continuous 12-week period must be maintained at least once every five years. If you prefer the cents per kilometre method, no logbook is required, but you are limited to 5,000 kilometres per vehicle per year.
Lodgement deadlines and how P&D Accountants can help
The standard lodgement deadline for individual tax returns is 31 October each year. Clients who use a registered tax agent under the Tax Agent Lodgement Program typically qualify for an extended deadline — sometimes as late as May of the following year — without any additional application from the client.
P&D Accountants prepares individual tax returns for employees, sole traders, rental property owners, investors, and anyone whose tax situation involves more than a simple PAYG summary. We review your financial records, identify every deduction you are entitled to, and lodge your return correctly and on time.
Most individual returns we handle are completed within three to five business days of receiving your documents. We work with clients across Australia, entirely online.
Ready to lodge your individual tax return?
Let our CPA-qualified team find every deduction you are entitled to and lodge your return correctly and on time.
Call us on 0468 070 010Frequently asked questions
What is the tax-free threshold in Australia for 2025-26?
The tax-free threshold is $18,200. If your taxable income is below this amount and you had no tax withheld, you may not need to lodge. Speak with a registered tax agent to confirm your position.
Can I claim working from home expenses if I am an employee?
Yes. Employees who worked from home during 2025-26 can claim using either the revised fixed rate method (70 cents per hour) or the actual cost method. You need records of your actual hours worked.
How long should I keep tax records?
The ATO requires records to be kept for five years from the date you lodge your return. This applies to receipts, invoices, bank statements, and any other documentation supporting your claims.
What happens if I miss the 31 October lodgement deadline?
If you miss the deadline and are not registered with a tax agent, the ATO may issue a failure-to-lodge penalty. Registering with a tax agent before the deadline generally extends your due date under the Tax Agent Lodgement Program.