Tax expert urges Australians to start record-keeping now to boost 2025/26 returns

A tax expert has urged Australians who were disappointed by their recent refunds to start record-keeping immediately to maximise their returns for the 2025/26 financial year.

The average tax refund so far this year is $2,639, a figure Belinda Raso, director of Tax Invest Accounting, said can serve as a benchmark for taxpayers assessing their own outcomes. "It's a great time to ask yourself, how does your refund compare?" she told Yahoo News.

Raso recommended a series of practical steps aimed at strengthening claims next year. Employees who use their car for work were advised to begin and maintain a compliant logbook immediately, noting kilometres and business use, because a properly kept logbook can significantly affect the size of motor-vehicle deductions.

For those working from home, Raso said taxpayers should track all relevant expenses and compare the fixed-rate method — 70 cents per hour — against the actual-cost method to determine which yields the larger deduction. She also suggested employees planning to buy work-related items with a cost above $300, such as tools, equipment or computers, should consider making those purchases before the end of the current financial year to maximise depreciation and immediate claims.

Raso stressed the importance of record retention: keep receipts for purchases even if unsure whether an item is deductible. She recommended photographing receipts and saving them in a folder labelled "Tax 2026" on a smartphone for later review.

Taxpayers were also cautioned not to assume government changes remove the need for good records. The Albanese government announced a $1,000 automatic tax deduction for the 2025/26 financial year intended to simplify claims for work-related expenses by applying a standard deduction without the need for receipts or itemised claims. However, Raso said the automatic deduction will produce only a modest refund for many middle-income earners.

For taxpayers earning between $45,000 and $135,000, the government’s measures will translate to an estimated refund of roughly $320, according to Raso. "So don't get complacent," she said, noting that proactive record-keeping and considered timing of purchases can still increase tax outcomes beyond the automatic deduction.

Since the start of the financial year on July 1, the Australian Taxation Office has processed 4.5 million refunds from 6.1 million lodged returns, paying out about $12 billion. With roughly a quarter of returns lodged so far and the October 31 lodgement deadline approaching for many taxpayers, Raso urged Australians to act now if they want to improve next year’s result.

Tax agents and accountants say routine record-keeping reduces the administrative burden at lodgement time and supports larger, legitimate claims where taxpayers are entitled to them. The choice between the fixed-rate working-from-home method and the actual-cost method often hinges on the thoroughness of a taxpayer's documentation.

As the new deduction is introduced, taxpayers who typically claim significant work-related expenses — including those who use vehicles heavily for work, run small businesses or have substantial equipment or uniform costs — will remain reliant on traditional substantiation to capture the full value of deductible expenses.

The ATO and professional advisers recommend maintaining contemporaneous records throughout the year rather than attempting to reconstruct expenses retrospectively. For many individuals, the combination of early planning, timely purchases where appropriate and consistent record-keeping will determine whether next year’s refund exceeds this year’s benchmark.