Tax Deductions Action Plan

The fixed-rate method (70c per hour for 2025-26) is simpler — just track your WFH hours and multiply. The actual-cost method requires you to calculate your share of electricity, internet, phone, stationery, furniture depreciation, and cleaning, then apportion by floor area and work hours. Fixed rate wins if you work fewer than ~20 hours/week from home. Above that, actual cost typically gives a larger deduction, especially if you have a dedicated home office. Use the WFH calculator to compare both methods with your real numbers.

Cents per km is capped at 5,000 business km per year ($4,250 at 85c/km for 2025-26). If you drive more than 5,000 work-related km, the logbook method will give you a larger deduction — you claim the actual percentage of all car expenses (fuel, rego, insurance, servicing, depreciation) based on your 12-week logbook. The Action Plan above tells you where your breakeven is. Note that you need to keep a valid 12-week logbook and it remains valid for 5 years unless your circumstances change materially.

Under ATO ruling TR 98/5, you can claim up to $150 per year in laundry expenses (washing, drying, ironing work clothes) without keeping written receipts, as long as you can show you incurred the expense — for example, by showing you wore a work uniform and did a reasonable number of washes. If your laundry costs exceed $150, or if the ATO asks for evidence, you'll need receipts or a reasonable basis for your calculation. Above $150, written evidence is required.

Yes, under section s82KZL of the ITAA 1936, you can prepay up to 12 months of investment loan interest before 30 June and claim the full deduction in the current tax year. This is a powerful EOFY strategy — you bring forward a full year's deduction into the current year at your current marginal rate. The Action Plan above evaluates whether this is worth doing for your specific loan balance and tax bracket. Note: this only applies to investment properties, not your main residence.

The 2025-26 Instant Asset Write-Off (IAWO) threshold is $20,000 per asset for small business entities with aggregated turnover under $10 million. Each asset costing less than $20,000 can be immediately deducted in full in the year of purchase. The timing matters: buy and install (or ready-for-use) the asset before 30 June to claim it in the current year. The Action Plan above flags if you have eligible purchase value and reminds you of the EOFY deadline.

Diminishing value (DV) gives you a larger deduction in the early years — it applies 200% of the prime-cost rate to the declining balance each year. Prime cost (PC) spreads the deduction evenly over the asset's effective life. DV is usually better if you expect to hold the asset long-term and want to maximise early deductions; PC is simpler and may be better if you expect to sell within a few years (since DV front-loads deductions, you'll have a lower written-down value and larger balancing adjustment on disposal). The Action Plan's depreciation lever links to the full depreciation calculator to compare both schedules.