Tax Planning Strategies for Individuals

Why Consider Personal Tax Planning Strategies?

Personal income tax (or individual income tax) is based on your wages, salary and any other income you earn, like rent, dividends and capital gains from shares or crypto. Keeping the following tips in mind will enable you to firstly, know what to expect in terms of declaring income that you haven’t already paid tax on; and secondly, maximise your tax return so you can claim back more of your hard-earned money.

One heads up before we start. The 2026-27 Federal Budget (handed down 12 May 2026) delivered the biggest shake-up to the taxation of personal investment income in decades. Most of it starts on 1 July 2027, which gives you a full year to plan. Here's what's changed and what to do about it.

What's Changed for Individuals

• Lower tax on your first $45,000. From 1 July 2026 the 16% rate dropped to 15%. It drops again to 14% on 1 July 2027. Your 2025-26 return (the one you're lodging right now) still uses the 16% rate.
• A $1,000 instant tax deduction. From the 2026-27 income year, eligible workers get an automatic standard deduction of up to $1,000 for work-related expenses. No receipts, no spending required. It's reduced by any work-related expenses you do claim, so it only helps if your total work expenses land under $1,000. Union fees and professional memberships are the exception (claim them and your standard deduction stays intact). It doesn't apply to your 2025-26 return.
• A $250 Working Australians Tax Offset. This one arrives in the 2027-28 income year.
• Capital gains tax is being rebuilt. For gains accruing from 1 July 2027, the 50% CGT discount is replaced by CPI indexation of your cost base, plus a 30% minimum tax on net capital gains. Gains accrued up to 30 June 2027 keep the 50% discount, so assets you already hold get a transitional split. The main residence exemption and small business CGT concessions survive.
• Negative gearing is narrowing. Buy an established residential property after 7:30pm AEST on 12 May 2026 and your rental losses can only be deducted against residential property income. Unused losses carry forward. Properties you held (or had under contract) before that time are grandfathered. New builds, shares and commercial property are untouched.
• Discretionary trusts are on notice. A 30% minimum tax on most discretionary trusts is proposed from 1 July 2028. It isn't law yet, but if you distribute through a family trust, this is the year to start the conversation. Rollover relief will be available for 3 years from 1 July 2027 for anyone who needs to restructure.

Timing Income After June 30

Tax rates are dropping 3 years in a row, so the year you receive income matters more than usual. Consider the timing of:

• Bonuses
• Franked dividends from private companies
• Capital gains events (selling an asset that results in a capital gain or loss)
• Cryptocurrency

The CGT reset is the big one. If you're sitting on an asset with a large gain, selling before or after 1 July 2027 changes your tax outcome. Sometimes in your favour, sometimes not. It depends on how long you've held it, inflation over that period and your marginal rate. Model it before you sell.

Timing Expenses Before June 30

Expenses relating to investment activities and work-related expenses can be paid before 30 June this financial year.

Don't delay those rental property repairs. Consider prepaying up to 12 months of interest on investment property or share loans before 30 June. Paying these before year end lowers your taxable income and lifts your deductions.

One thing has changed. From 2026-27, small work-related expenses may not move the needle if you're covered by the $1,000 standard deduction. Investment and rental deductions, donations, personal super contributions and income protection premiums all sit outside it and are claimed as normal.

Sound confusing or time consuming? Leave it to the accountants at BlueRock to guide you through the details.

Voluntary Superannuation Contributions

If you're eligible, a personal concessional contribution before 30 June can give you a tax deduction. For 2026-27:

• Concessional contributions cap: $32,500 (up from $30,000)
• Non-concessional contributions cap: $130,000
• Catch-up contributions: unused concessional caps from the past 5 years, if your total super balance was under $500,000 at the previous 30 June

These contributions are taxed at 15% in the fund, well under the 30-45% you'd pay in your own hands.

New this year: Division 296. From 1 July 2026, if your total super balance is above $3 million, an extra 15% applies to the share of your earnings above that threshold. Above $10 million, another 10% applies on top. It's calculated on realised earnings (not paper gains) and both thresholds are indexed to CPI. For most people it doesn't change the case for contributing, but if you're near either threshold, get advice first.

Payday super also started on 1 July 2026, so employers now pay super with every pay run. Worth checking your salary sacrifice arrangement is keeping pace with your cap.

Please note that we recommend you speak with your financial advisor prior to making any contributions to superannuation.

Other Individual Tax Considerations

• Salary packaging and salary sacrifice arrangements are an effective way to reduce your taxable income. These might include additional superannuation contributions, healthcare, living away from home expenses, or a salary sacrifice car.
• Electric vehicles keep a full FBT exemption up to $75,000, as long as the arrangement starts before 1 April 2029. Above $75,000, a 25% FBT discount applies from 1 April 2027.
• If you have Income Protection Insurance , the premiums paid are usually tax deductible.
• You can claim a deduction for self-education expenses if the education relates to your current work situation or if you receive a taxable bonded scholarship.
• Working from home expenses cover internet, mobile, home phone, stationery, computer consumables and energy. The ATO has 2 methods: actual cost, or the fixed rate of 70 cents per hour for 2025-26. Either way you need a record of your hours kept at the time. Estimates don't cut it. We know all the ins and outs of WFH and will make sure the best method is used to get the highest deduction.
• Donations to a registered charity, public ancillary fund or private ancillary fund are tax deductible. So remember to ask for a tax receipt. Keep in mind that GoFundMe donations are only deductible if the money went to a registered charity.

Personal Services Income

If you're in a personal services industry such as a medical profession, graphic design or IT consultancy, your income earned is derived from personal skills. These incomes are deemed as Personal Services Income (PSI). The ATO defines PSI as income derived by the personal efforts or skills of an individual.

The ATO looks through any trading structures such as trusts or companies to attribute any PSI earned by an individual from their personal efforts to the individual themselves. Therefore, it's important to ensure that any profits earned when operating via a trust or company are appropriately paid out to you before 30 June.

With a 30% minimum tax on discretionary trusts proposed from 1 July 2028, anyone running PSI through a trust should review whether the structure still stacks up.

Key Dates

• 31 October 2026: lodgement deadline for your 2025-26 return if you're self-lodging. Sign up with a tax agent before then and you'll get more time.
• 1 July 2027: CGT indexation, the 30% minimum tax on capital gains and the negative gearing changes start. The bottom rate drops to 14%.
• 1 July 2028: proposed 30% minimum tax on discretionary trusts.

Get the Support You Need to Grow Your Personal Wealth

No matter what your individual circumstances are, there are different tax strategies to consider to make the most of your tax return. Whether that relates to your superannuation, personal services income, SMSF, or tax reduction strategies for high earners, BlueRock's accountants and financial planners can help make tax time less of a burden for you.

If you're ready to maximise your personal income tax this financial year, get in touch with one of our personal accounting experts via the form below.

This article is general information only and doesn't take your personal circumstances into account.