2025 Tax Return Changes Explained: What You Need to Know
With the 2025 financial year fast approaching, Australian taxpayers—both individuals and businesses—must prepare for notable changes in the way tax returns are assessed, lodged, and audited. These upcoming reforms to Australia’s Financial Services and Tax Law will affect deductions, compliance obligations, and ATO oversight mechanisms.
In this article, we break down what you need to know, who’s affected, and how you can stay compliant while optimising your return.
Revised Work-From-Home (WFH) DeductionsThe shortcut method introduced during COVID-19 (at 80 cents/hour) will be phased out. Instead:
Taxpayers must now keep itemised records of actual costs (e.g. electricity, internet, stationery).
A revised fixed rate method is available at 67 cents/hour, but only covers specific expenses.
Digital Asset ReportingThe ATO is tightening regulations around cryptocurrency and digital assets:
Exchanges will be required to report real-time transaction data.
Individuals must disclose digital asset gains/losses in their annual return.
Small Business Instant Asset Write-Off ThresholdFor FY2025, the instant asset write-off threshold will reduce from $20,000 to $1,000. This change affects:
Sole traders
Small and medium enterprises (SMEs)
Partnerships relying on upfront equipment deductions
Stronger Enforcement of Superannuation ComplianceFrom 1 July 2024, real-time SuperStream data sharing between employers and the ATO will begin:
Late payments will trigger automatic penalties.
Employers must reconcile superannuation contributions more frequently to avoid non-compliance.
Taxpayer Transparency and DisclosureLarge private companies earning over $100 million must now disclose:
Effective tax rate
Country-by-country reporting
Tax governance summaries
This supports the Treasury’s move towards greater tax transparency and fairness.
Who Will Be Affected?
These tax changes are far-reaching and will impact:
Employees who work remotely and claim deductions
Cryptocurrency investors and NFT traders
Small business owners with equipment purchases
Large corporations facing new disclosure rules
Employers responsible for staff superannuation payments
Compliance Risks and Financial Law Obligations
Australia’s Financial Services and Tax Law places strict duties on businesses and individuals when it comes to disclosure, honesty, and lodgement deadlines. The 2025 changes increase the risk of non-compliance if you’re unaware of the new requirements.
You could face:
Administrative penalties for inaccurate reporting
ATO audits, particularly for crypto or WFH claims
Fines for late superannuation or PAYG contributions
Higher scrutiny for “unsubstantiated deductions”
Working with a trusted financial and tax law specialist ensures your reporting is legally accurate, meets the latest compliance standards, and protects you from reputational or financial harm.
How to Prepare for Your 2025 Tax Return
Here are practical steps to prepare ahead of time:
Review Your Record-KeepingStart tracking receipts, work hours, and expenses now. The ATO will not accept broad estimates or poor documentation under the new WFH deduction rules.
Understand Cryptocurrency TaxationEnsure your digital transactions (including capital gains from crypto sales) are well-documented and appropriately reported. The ATO's data-matching systems are now real-time and integrated with crypto exchanges.
Adjust Asset Purchase StrategiesSmall businesses should reassess their asset acquisition plans before the $1,000 write-off limit returns. Consider purchasing eligible assets before 30 June 2024 to claim the current higher threshold.
Conduct a Tax Health CheckEmployers should conduct internal audits to ensure superannuation, fringe benefits, and BAS obligations are being met accurately and on time.
Why Legal Support is Essential
Navigating the evolving landscape of financial services and tax law can be complex—especially as the ATO introduces new regulatory technology (RegTech) to track and flag anomalies.
At New South Lawyers, we offer expert guidance across:
Tax planning and compliance
Crypto and digital asset taxation
Superannuation and employer obligations
SME and corporate tax strategy
Defence against ATO investigations or disputes
Our team stays across every legislative change to ensure you or your business remains protected.
The 2025 financial year ushers in substantial changes to how tax is reported, audited, and enforced in Australia. Whether you’re an employee working from home, a digital asset investor, or a business owner, understanding and adapting to these reforms is critical.
At New South Lawyers, we’re here to help you navigate the new Financial Services and Tax Law landscape. Let us simplify the legal side of your finances, ensure full compliance, and uncover opportunities for smart tax planning.
