How to Maximise Your Tax Refund Legally in Australia

Recently, I met with a client for a consultation. She earns over $200,000 a year, and the first thing she said to me was, “I know nothing about tax strategies and I’m paying loads of tax—how do I minimise it?” That conversation made me realise how many Australians are in the same position: hardworking professionals who pay significant tax but don’t fully understand the legal strategies available to reduce their burden.

When tax season rolls around, most people share the same goal—getting the biggest possible tax refund. Yet there are plenty of myths and risky “shortcuts” floating around that can land you in trouble with the ATO. The good news? You don’t need to bend the rules to boost your return. By understanding what deductions you’re entitled to, keeping your records in order, and planning ahead, you can legally maximise your refund and keep more of your hard-earned money.

At Investax, we specialise in helping individuals, property investors, and small business owners structure their finances to achieve the best results at tax time. In this guide, we’ll share practical, proven strategies you can start using right now to improve your tax outcome—without crossing the line.

What is a Tax Refund? 

I’m often surprised by what I hear when speaking with the general public. A common myth is, “I earn too much and pay too much tax, so I should automatically get a bigger refund.” Many people treat tax as if it were a savings account, expecting a lump sum back at the end of the year.

In reality, a tax refund isn’t a bonus from the ATO—it’s simply the amount you’ve overpaid in tax throughout the year. If your employer withheld too much PAYG tax or you’ve claimed eligible deductions, that excess is returned to you. Maximising your refund isn’t about “tricking” the system; it’s about making sure you’re claiming every deduction you’re legally entitled to and accurately reporting your income and expenses.

What Is a Tax Deduction and How Does It Work?

A tax deduction is simply an expense that the ATO lets you claim to reduce the amount of income you’re taxed on. It doesn’t mean you get that exact amount back in your refund—it just lowers your taxable income, which in turn lowers your tax bill. To be eligible, the expense usually needs to be connected to earning your income, paid for by you (not reimbursed by your employer), and backed up with receipts or records.

Here’s an easy example. Imagine you earn $80,000 a year. During the year, you spend $5,000 on legitimate work-related costs like tools, training, or professional memberships. Instead of being taxed on the full $80,000, your taxable income drops to $75,000. If you’re in the 32.5% tax bracket, that $5,000 worth of deductions saves you about $1,625 in tax. The higher your income, the bigger the impact deductions can have—which is why they’re such an effective way to keep more of your money in your own pocket.

What Is Tax Planning and Is It Legal?

Now that we’ve cleared up the basics of tax refunds and tax deductions, let’s move on to the real question: how do you actually maximise your refund or minimise your tax bill? The truth is, you can’t do much once the financial year has ended. As mentioned earlier, it’s not about “tricking” the system or making things up on your tax return—it’s about working with your existing finances and making smart choices throughout the year. This is what’s known as tax planning.

Tax planning isn’t about avoiding tax altogether—it’s about using the rules that already exist to your advantage. It may involve structuring your income more effectively, knowing which deductions apply to your profession or investments, and strategically timing expenses so they fall into the right financial year. When done correctly, tax planning ensures you’re paying no more tax than legally required, while keeping more of your money in your pocket.

And yes, tax planning is completely legal. In fact, the ATO expects taxpayers to arrange their affairs in a way that minimises tax, as long as it’s within the law. For example, imagine you’re a high-income earner paying tax at 49% on all your income, and you hold a share portfolio that generates $30,000 in dividends each year. Those dividends are taxed at your top marginal rate. Meanwhile, your spouse has no taxable income and therefore pays no tax. If that share portfolio was held in a discretionary trust, you could distribute the $30,000 dividend to your spouse’s tax return, where it would be taxed at a much lower rate—or even potentially tax-free—rather than at 49%. This is tax planning in action: a smart, legal strategy that reduces the household’s overall tax without crossing into tax avoidance.

That’s the difference between planning ahead and scrambling at year-end.

Claim All Work-Related Deductions

The only way to truly maximise your tax deductions is to make sure you’ve claimed every deduction you’re eligible for in your tax return. Every profession has its own unique set of allowable claims that others may not qualify for. For example, a real estate agent can claim the cost of gifts for clients, but a bus driver cannot. That’s why knowing your profession and the deductions that specifically apply to you is so important.

Some of the most common work-related deductions include:

• Home office expenses – If you work from home, you may be able to claim electricity, internet, phone, or office equipment using either the fixed rate or actual cost method.
• Uniforms and protective clothing – The cost of occupation-specific clothing, safety gear, and even laundry expenses if they’re directly related to your job.
• Training and education – Courses, seminars, or workshops that directly improve your current job skills.
• Tools and equipment – Tradespeople can claim tools, while office workers may claim items like computers or printers used for work.

Always keep in mind the ATO’s three golden rules: you must have paid for the expense yourself, it must directly relate to earning your income, and you must have records to prove it.

Use Superannuation Contributions to Your Advantage

Superannuation isn’t just about retirement—it can also play a big role in improving your tax refund. By making personal deductible contributions, you can top up your super from your after-tax income and then claim a tax deduction for it, effectively reducing your taxable income. However, you need to be mindful of the contribution cap—in the 2025 financial year, the concessional contributions cap is $30,000. Contributing more than this could actually leave you paying extra tax, unless you have unused cap amounts from previous years that you can carry forward. If your income falls under certain thresholds, you may also qualify for the government’s co-contribution scheme, where the government makes an additional contribution to your super when you add your own. Used correctly, these strategies not only help you maximise your tax refund but also build your long-term wealth at the same time.

Ensure You’re Claiming All Other Deductions

Beyond the common work-related claims, there are plenty of other deductions that taxpayers often overlook. Expenses such as charitable donations to registered charities, the timing of certain costs before 30 June (like professional memberships or property repairs), and even prepaying investment loan interest can all make a meaningful difference to your tax outcome. At the same time, it’s important to avoid common pitfalls that raise ATO red flags, such as claiming “round number” amounts without receipts, double-claiming employer-reimbursed expenses, or making excessive travel claims that don’t match your job profile. Staying thorough, accurate, and compliant ensures you’re maximising your refund without creating unnecessary audit risk. If you’d like to explore this topic in more detail, we’ve covered it extensively in our article on the most overlooked tax deductions in Australia.

What’s Next?

Maximising your tax refund isn’t about chasing loopholes or trying to trick the ATO—it’s about being proactive, organised, and strategic. From understanding the difference between refunds and deductions, to making use of superannuation contributions, property claims, and other overlooked deductions, there are plenty of ways to keep more of your hard-earned money in your own pocket. But the real key is planning ahead.

At Investax, we help individuals, property investors, and small business owners structure their finances in a way that not only minimises tax but also builds long-term wealth. An accounting fee paid to a good accountant should be seen as an investment—not a cost. Especially when that fee is 100% tax deductible, it makes sense to work with someone who understands the complexity of tax law, property, and business structures.

We offer a 15-minute free consultation to discuss your tax, property investment and business needs. Book your complimentary consultation now.

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Before making an investment decision based on this advice you should consider, with or without the assistance of a securities adviser, whether it is appropriate to your particular investment needs, objectives and financial circumstances. In addition, the examples provided on this page and on this website are for illustrative purposes only.

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