Your EOFY Tax Checklist for 2025

Key Takeaways

  • Act Before 30 June: Finalise key actions now to maximise your 2025 tax deductions, especially with the $20,000 instant asset write-off set to end.
  • Stay Compliant: Claiming valid deductions like bad debts is crucial, but so is avoiding common ATO audit triggers like the personal use of business assets.
  • Plan for Major Changes: Prepare your budget and processes for upcoming increases to Paid Parental Leave and the Superannuation Guarantee.

Your Essential ATO To-Do List

The end of the financial year (EOFY) is a critical time for tax planning. A proactive approach can significantly improve your cash flow and ensure your business is on a strong footing for the year ahead. Here is your essential checklist of tax-planning tasks to consider before 30 June 2025.

1. Upgrade Assets with the $20,000 Instant Asset Write-Off

The $20,000 instant asset write-off is available for the 2024–2025 financial year but is scheduled to end on 30 June 2025.1

  • Who is eligible? Businesses with an aggregated annual turnover of less than $10 million.
  • What can you claim? An immediate deduction for eligible assets (both new and second-hand) that cost less than $20,000 each.
  • What’s the deadline? The asset must be installed and ready for use by 30 June 2025.

While you shouldn't buy assets just for a tax deduction, this is a valuable opportunity if you already planned on upgrading equipment.

2. Prepay Expenses to Claim a Deduction Early

Small businesses can often claim an immediate deduction for prepaid expenses. This strategy brings a tax deduction into the current financial year, reducing your tax bill now. Common examples include prepaying business insurance, rent, or annual software subscriptions. To be eligible under the '12-month rule', the service period you are paying for must be no more than 12 months and must end in the next financial year (i.e., by 30 June 2026).2

3. Write Off Genuinely Bad Debts

You can claim a tax deduction for income you've earned but are certain you cannot recover. Before 30 June, review your outstanding customer accounts (debtors). To claim the deduction, you must prove the debt is genuinely unrecoverable and formally write it off in your accounting system before the end of the financial year.3

4. Be Aware of ATO Focus Areas

The ATO is currently scrutinising several key areas, including:

  • Personal Use of Business Funds: Company money is not personal money. All funds taken from a company must be properly recorded as a wage, dividend, or a formal loan.
  • Non-Commercial Losses: You can only deduct losses from a business activity against other income (like a salary) if you meet one of the ATO's commerciality tests. Losses from hobbies cannot be claimed.
  • Past Claims: The ATO continues to review claims from previous years, so ensure your past returns are accurate.

5. Prepare for Upcoming Legal Changes

Plan ahead for these significant changes:

  • Paid Parental Leave: The government scheme increases to 24 weeks for children born or adopted from 1 July 2025.
  • Super on Parental Leave: For those receiving the above leave, the Government (not the employer) will pay superannuation directly to the individual’s super fund.4
  • Superannuation Guarantee (SG): The rate for the 2024-25 year is 11.5%. It is legislated to rise to 12% from 1 July 2025.5

References

  1. $20,000 instant asset write-off for 2024–25 (ATO)
  2. Deductions for prepaid expenses (ATO)
  3. Bad debts (ATO)
  4. Superannuation on government funded Parental Leave Pay (ATO)
  5. How much super to pay (ATO)
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