Following the recent Federal election, the Albanese government has announced its intention to introduce a new $1,000 instant tax deduction aimed at easing the cost-of-living pressures. While full legislative details are yet to be confirmed, this proposal could offer a straightforward benefit to millions of Australian taxpayers – including employees, sole traders and small business owners.

Under the proposed measure, individuals would be able to claim up to $1,000 in work-related expenses without needing to keep receipts. This would be available as a standard deduction, simplifying the tax reporting process while still supporting legitimate work-related claims. The aim is to cut red tape and reduce the administrative burden on both taxpayers and the ATO.

However, the ATO is expected to implement integrity safeguards to prevent misuse. Claims will need to be reasonable, and it is likely that the deduction will be optional – taxpayers who incur higher deductible expenses can still opt to itemise and provide substantiation as they do now.

For clients who typically track their deductions closely or work in industries with higher out-of-pocket costs, the standard deduction might not be the most beneficial route. Our advice will continue to be tailored to your circumstances, especially for high net worth individuals and business owners who often benefit from more strategic tax planning.

We’ll provide a full update once legislation is introduced, including any changes to eligibility or implementation timelines. In the meantime, please feel free to reach out if you’d like to understand what tax relief applies to you for the 2024-25 financial year.