Get Started
2026 TAX UPDATES
Who can claim the work-from-home rate?
You're eligible to claim if you worked from home during the financial year and incurred expenses directly related to that work. This includes employees working from home, self-employed individuals, and business owners. The key requirement is that your home office expenses must be directly connected to earning your income.
Who can claim car travel deductions?
You can claim a deduction for car travel if you drove for work-related purposes and the expenses were directly connected to earning your income. This includes employees who travel between multiple work locations, self-employed professionals, business owners, and contractors. However, you cannot claim deductions for travel between your home and your regular workplace, as this is considered private travel.
What is the $1,000 without receipts deduction?
The Australian Taxation Office (ATO) permits eligible taxpayers to claim up to $1,000 in work-related expenses without substantiating documentation, provided certain conditions are met. This is designed to reduce the administrative burden for taxpayers with smaller expense claims and is particularly useful for those who may have lost receipts or have minor expenses that are difficult to document individually.
What is depreciation?
Depreciation is a tax deduction that allows you to spread the cost of an asset over its useful life, rather than claiming the entire expense in the year of purchase. For electronic items costing more than $300, the ATO requires you to claim depreciation rather than an immediate deduction.
2026 rental TAX UPDATES
Negative Gearing Changes and Deduction Limits
From 1 July 2026, the Australian Taxation Office has introduced new restrictions on how rental property investors can claim negative gearing deductions. Investors will now face annual caps on the amount of rental losses they can offset against other income. This change affects how you structure your investment portfolio and plan your tax strategy. It's essential to review your current rental properties and understand how these limits apply to your specific circumstances, particularly if you hold multiple investment properties across different states.
Capital Works Deduction Amendments
The 2026 tax year brings clarifications to capital works deductions for rental properties. The ATO has updated guidance on what qualifies as a capital improvement versus a maintenance expense. Notably, certain structural improvements and renovations now fall under stricter assessment criteria. Investors should maintain detailed records of all work completed on rental properties, including invoices and contractor details, to substantiate claims. The distinction between these categories directly impacts your annual tax liability and long-term depreciation schedules.
Rental Income Reporting and Digital Record-Keeping Requirements
New digital record-keeping standards came into effect for the 2025–26 financial year. All rental income, expenses, and supporting documentation must now be maintained in a format that meets ATO digital standards. This includes bank statements, receipts, and lease agreements. The ATO has increased compliance audits for rental property investors, so accurate and accessible records are more important than ever. Consider implementing accounting software or engaging a tax professional to ensure your records meet these requirements.
Depreciation Schedule Updates and Building Write-Off Rules
The depreciation rules for rental property plant and equipment have been refined for 2026. Building depreciation claims are now subject to updated effective life assessments, and the ATO has released new depreciation schedules for common rental property assets. If you've claimed depreciation on your rental property in previous years, you may need to review your schedule to ensure it aligns with the 2026 guidelines. This is particularly relevant for properties built before 1985 or those that have undergone significant renovations.
2026 Shares & Crypto updates
Capital Gains Tax Discount Changes for Share Investors
The 2026 tax year introduces revised holding period requirements for the capital gains tax discount on shares. While the 50% discount remains available for assets held over 12 months, the ATO has tightened the definition of what constitutes a continuous holding period. Share traders who frequently buy and sell within the same financial year should be aware that timing of transactions now carries greater scrutiny. Additionally, the discount no longer applies to certain high-frequency trading activities, which may affect day traders and active investors. Review your trading records to determine whether your investment strategy qualifies for the discount.
Cryptocurrency Taxation and Digital Asset Reporting
Cryptocurrency transactions are now subject to mandatory reporting requirements under updated ATO guidelines for 2026. Every crypto trade, regardless of profit or loss, must be recorded and reported in your tax return. The ATO has introduced new data-matching protocols with major Australian crypto exchanges, meaning your trading activity is increasingly transparent to tax authorities. Capital gains on crypto assets are taxed the same as shares, but losses can only be offset against capital gains—not general income. Investors holding crypto should maintain detailed transaction records, including dates, amounts, and Australian dollar values at the time of each trade.
Dividend Imputation and Franking Credit Updates
Changes to dividend imputation rules have affected how franking credits are calculated and claimed for 2026. The ATO has updated the treatment of unfranked and partially franked dividends, with stricter rules around dividend stripping and related-party transactions. If you receive dividends from Australian shares, ensure you understand whether they are fully franked, partially franked, or unfranked, as this directly impacts your tax position. Superannuation funds and low-income earners may also see changes to how they claim franking credits, so it's worth reviewing your specific circumstances.
Trading vs. Investment Classification and Record-Keeping Standards
The ATO has clarified the distinction between share trading (treated as income) and share investment (treated as capital gains) for the 2026 tax year. This classification affects how your profits are taxed and whether losses can be carried forward. The ATO now requires detailed documentation of your trading intent, including your investment strategy, frequency of trades, and holding periods. Digital record-keeping standards have also been strengthened, requiring all transaction confirmations, broker statements, and supporting evidence to be maintained in ATO-compliant formats. Investors should document their investment approach and maintain comprehensive records to support their chosen classification.
2026 sole trader ABN business tax updates
Simplified Tax Offset and Small Business Concessions
Sole traders with an annual turnover under AUD 10 million now benefit from expanded small business tax offsets for the 2026 financial year. The ATO has streamlined eligibility criteria, making it easier for eligible sole traders to claim the 20% unincorporated small business entity tax offset. However, new record-keeping requirements apply to substantiate your eligibility. You'll need to maintain clear documentation of your turnover, business structure, and active involvement in the business. If you're close to the turnover threshold, it's worth reviewing your business classification and ensuring your records support your small business status.
Home Office Deduction and Work-From-Home Expenses
Updated guidance on home office deductions has been released for sole traders working from home in 2026. The ATO now accepts two methods: the simplified fixed rate of 67 cents per hour worked from home, or the detailed method based on actual expenses. The key change is stricter documentation requirements for the detailed method—you must apportion your home expenses (rent, utilities, internet, depreciation) based on the percentage of your home used for business. The ATO has also clarified what qualifies as a dedicated workspace, so ensure your home office setup meets the criteria. Many sole traders find the fixed-rate method simpler and less audit-prone.
Superannuation Contributions and Concessional Deduction Limits
Sole traders can now claim tax deductions for personal superannuation contributions up to the concessional contribution cap of AUD 27,500 for the 2025–26 financial year. This is a valuable tax planning opportunity, but contributions must be made before the end of the financial year and properly documented. The ATO has introduced new reporting requirements for self-managed super funds (SMSFs), including stricter audit trails and transaction documentation. If you operate an SMSF or are considering one, ensure you understand the compliance obligations and contribution limits. Excess contributions attract penalties, so careful planning is essential.
Expense Deduction Tightening and Substantiation Requirements
The ATO has increased scrutiny of sole trader expense claims for 2026, with particular focus on mixed-use expenses and personal deductions. Common areas flagged include vehicle expenses, meals and entertainment, and travel costs. You must now maintain detailed records showing the business purpose of each expense, including dates, amounts, and supporting invoices or receipts. The ATO's data-matching programs have expanded, linking your tax return to bank statements and credit card transactions, so discrepancies are more likely to be detected. Keep contemporaneous records—receipts and invoices should be retained for five years. If you claim vehicle expenses, maintain a logbook showing business versus private use.
