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CPA PRACTICE
Individual Tax Guide

Can We Help You Save an Extra $2,000 in Tax?

Discover the most common missed deductions that could be costing you thousands every year — and how the right method can make all the difference.

Home Office Deductions
Motor Vehicle Claims
No-Receipt Deductions
Impact Taxation And Financial Services Pty. Ltd. is a CPA Practice.
Liability limited by a scheme approved under Professional Standards Legislation.

The Hidden Tax Savings

Every year, we help many new clients review and amend tax returns prepared by previous accountants. Unfortunately, we often find that legitimate deductions were missed or poor advice was given.

Average Additional Tax Savings

$2,000

compared to previous accountants

If you’re not yet our client, it may be worth giving us a try. Below are some of the most common missed deductions we see.

1. Incorrect Methods Used

🏠 Home Office Expenses

Many accountants automatically use the fixed rate method for convenience and never explain or calculate the actual cost method. This can cost you thousands in missed deductions.

Real Client Example
Fixed Rate Method (previous accountant) $300
Actual Cost Method (our calculation) $4,000+

🚗 Motor Vehicle Expenses

Some accountants don’t raise motor vehicle deductions at all. Others only use the cents per kilometre method because it’s simpler. However, where eligible, the logbook method can significantly increase deductions.

Real Client Example
Cents per Kilometre Method ~$3,000
Logbook Method $10,000+

The right method can mean the difference between hundreds and thousands in deductions

Don’t let convenience cost you money

2. Deductions Without Receipts

You don’t need receipts for every deduction. Many taxpayers are unaware of what can be claimed without receipts under ATO rules.

Each year, our individual clients legally claim up to tens of thousands of dollars in deductions without receipts. The ATO has specific rules about what can be claimed without documentation, and knowing these rules can significantly increase your refund.

Key Insight

Understanding the ATO’s rules on receipt-free deductions can unlock significant savings that many taxpayers miss entirely. This is one of the areas where professional advice makes the biggest difference.

3. Missing Borrowing Cost Deductions

Borrowing costs relate to loan establishment fees and other costs connected to investment property loans. These costs can be amortised and claimed over the first 5 years after purchasing a rental property.

Borrowing Cost Deductions on Rental Properties
Loan establishment fees ✓ Deductible
Lenders Mortgage Insurance (LMI) ✓ Deductible
Other loan-related costs ✓ Deductible
Claim period First 5 years

When Lenders Mortgage Insurance (LMI) is involved, total deductions can reach tens of thousands of dollars. Every year, we see multiple new clients whose borrowing cost deductions were completely missed by their previous accountant.

Key Takeaway

The items above are only a few of the missed opportunities we identify regularly when reviewing tax returns. A second opinion can often make a significant difference.

Latest Tax & Economic Updates

Staying informed is the first step toward keeping more of what you earn. Here are the latest developments every taxpayer should know about.

RBA Rate Hikes Expected in 2026

CBA Forecasts 25bp Rise in February

Commonwealth Bank has revised its forecasts, now expecting a 25 basis point cash rate rise in February. CBA expects the cash rate to sit at 3.85% at the end of 2026, with the RBA “fine tuning” rather than a large hiking cycle.

CGT Capital Gains Tax Discount Under Review

Policy Think Tanks Call for Reduction

The 50% CGT discount is under scrutiny, with think tanks arguing it overcompensates investors for inflation. The Grattan Institute noted average annual house price growth (6.4%) has outpaced inflation (2.9%) since 1999.

SMSF Division 293 Red Tape Reduction

Technical Amendment Recommended

The SMSFA has recommended a technical amendment to address the unintended legislative gap that penalises taxpayers who receive lump sum superannuation payments due to employer non-compliance.

Estate Family Feuds and Lost Inheritances

How to Avoid a Fall Out

With 558,000 Australians now aged 85+ (expected to hit 1 million in 13 years), billions will soon transfer to younger generations. Blended families and unprepared heirs are contributing to legal disputes over assets.

Take the Next Step

If you would like to see how much tax you may be able to save, or have us assist with a 2025 tax return amendment (if you’ve already lodged), you are welcome to book a consultation with us.

At Impact Taxation & Financial Services, we specialize in helping individuals like you navigate the complex world of tax planning. Our team has years of industry experience as Financial Controllers and Senior Financial Managers.

Ready to Save on Your Personal Tax?

We provide free 30-minute consultations for all new clients to show you how to maximize and protect your wealth.

Book Your Free Consultation

Or call us directly:

1300 TAXSAV (1300 829 728)

[email protected]

3/80 Kitchener Parade, Bankstown, NSW 2200

Impact Taxation And Financial Services Pty. Ltd. is a CPA Practice.

Liability limited by a scheme approved under Professional Standards Legislation.

© 2025 Impact Taxation & Financial Services. All rights reserved.

This document is for general information purposes only and does not constitute financial, tax, or legal advice. Please consult with a qualified professional before making any financial decisions.

10 things you should consider before buying a property

Are you considering buying a property? Do you know you could miss opportunities to save thousands, or tens of thousands of dollars if you don’t plan well before the purchase?

Below are a few key considerations:

1. How should you set up your loan structure? If you don’t have a loan offset account for a rental property, after you make extra payments directly to the loan account, you can only claim interest deduction on the remaining balance of the loan. For tax purposes, this deductible balance can’t be changed even if you redraw the overpaid amount later. A good loan structure could also help you to stabilize interest rate and speed up loan repayment by combining a standard variable loan (with an offset account) and a fix rates account.

2. Timing of renovation. You might want to do a renovation right after you have bought the rental property. But do you know for any genuine repair & maintenance included in the renovation, you can claim an outright deduction against the rental income when the property is available for rental? If the work is done before the date when the property is available for rental, you can only claim the deduction against future capital gain when the property is sold. Depend on when you are going to sell, it could take years or up to decades before you can claim the deduction.

3. How should you split ownership? You might want to share the property ownership with a family member. For tax purposes, the percentage of ownership is based on the legal title, regardless of who is paying more on the mortgage. If the property will give you a tax profit, you might want to allocate more
ownership to the low-income earner to utilize the lower marginal tax rate. If it is giving you a tax loss, you might want to allocate more ownership to the high-income earner to utilize the loss. The goal is for the family to pay minimum tax together.

4. Should you use a family trust to purchase the property? There are many pros and cons related to a family trust. The advantages include tax savings on rental profit or capital gain, asset protection and succession planning on family wealth. However, family trust can’t distribute losses. All losses are trapped in the trust to be used to offset future trust profit. Therefore, you can’t utilize any rental loss in a trust to offset other income such as salary & wages. Family trusts also attract high accounting fees on initial setup and annual fees on financial statements and tax returns. State governments also charge much higher land tax on family trusts.

5. Will the income level change in future years for different owners? You might want to forecast the possible income for different owners to understand total tax payment / savings related to the property. This could also impact on your decision making on point 3 and 4 above.

6. Understand when you can treat your property as main residence to receive an exemption on capital gains tax. When eligible, even if you have received rental income, you could still treat your rental property as main residence and receive the exemption. To be eligible, you will need to treat it as your main residence at the beginning. Please check out this ATO link: Treating former home as main residence.

7. Decide whether you need to purchase a depreciation report. Most taxpayers don’t know that the depreciation on the building will need to be added back to calculate capital gains tax when the property is sold. When the property is held for more than 12 months, after applying the capital gains tax discount of 50%, it will effectively cut the tax rate by half at the time of sales. This makes depreciation deductions desirable for high income earners. However, for low-income earners it might not be ideal to claim depreciation as a rental deduction since they could be paying more on capital gains tax in the future. It could get more complicated if the property is under joint ownership between high and low income earners.

8. You might want to consider Centrelink payments for future or existing owners. Most Centrelink payments are income and asset tested. Before attaching a rental property to a family member who is receiving, or plan to receive government benefits, you might want to check the testing thresholds first to see if the Centrelink payment will be impacted. This is also applicable when you are making distributions from a family trust to different family members.

9. Have you considered using your SMSF (selfmanaged super fund) to make the purchase of a rental property? There are a lot of tax saving opportunities with a SMSF since the income tax rate is only 15%. And the capital gains tax rate is effectively only 10% after factoring in the 1/3 discount. The major downside with a SMSF is normally you can’t get the money out until you retire or on compassionate grounds (SMSF does have more flexibilities compared to normal retail super fund. But the choices are still very limited). It could be expensive to set up and operate a SMSF too. There are also strict legal requirements on the trustees. Penalties on incompliance could be severe. Tax law around SMSF is very complicated too. You will need to find a good tax accountant specialized in SMSF to help you to understand the structure, also do a cost-benefit analysis before setting it up.

10. Consider internal ownership changes. For your existing rental properties, you can also consider whether you should transfer the ownership between family members, or between different business structures (this is not applicable for SMSF). You might want to do this when the income level changes with family members, or rental property changes between tax profit and loss. Before the change, you need to consider the cost of transfer including capital gains tax, stamp duty, conveyancer fees, etc. Again, a cost-benefit analysis is a must before the change.

Last but not the least, did you combine all the above strategies and compare your choices? If you haven’t yet, how would you know that you have picked the best strategy to minimize your taxes? We can help you to factor in all considerations, compare different scenarios, also present you with a Property Prepurchase Report with all our findings to help you to make a decision. Contact us today to book in a consultation with an experienced tax accountant!

IMPORTANT INFORMATION
This is general advice only and does not consider your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from your financial adviser and seek tax advice from your accountant.

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