As June winds down, Australians are once again preparing for a familiar annual ritual.
Bargain hunters and savvy shoppers alike are eyeing the shelves and online deals.
But behind all the hype and slashed prices, there’s one common misstep that could catch many out this end of financial year (EOFY).
The EOFY shopping frenzy: Bargains or blunders?
There’s no denying the appeal of EOFY sales. Retailers drop prices dramatically, and the allure of a potential tax deduction makes that new laptop or ergonomic chair even more tempting.
But according to tax expert Natalie Lennon, many people fall into the trap of buying items they do not genuinely need, thinking it will reduce their tax bill.
‘Only buy things if you actually need them,’ Lennon advises. ‘Never do something just for the tax benefit.’
It’s a timely warning as EOFY marketing hits fever pitch. There’s a widespread misconception that every work-related purchase equals an automatic deduction.
As Lennon points out, it’s a bit like that scene in Schitt’s Creek where David assumes the government will ‘just pay for it’ if he writes it off.
In reality, the Australian Taxation Office (ATO) is far less forgiving.
How tax deductions really work
Let’s clear up a common myth. When you claim a tax deduction, you do not get the full amount back.
Deductions reduce your taxable income, meaning you receive back only a percentage of the expense—based on your tax bracket.
For example, if you fall into the top marginal tax bracket of 47 per cent, you’ll get back 47 cents for every dollar you spend on a legitimate work-related expense.
But most Australians are in lower brackets, meaning they get back just 19 or 32 cents per dollar spent.
So, if you purchase a $2,000 computer, you won’t be repaid that entire amount—just a portion of it via your tax return.
And there’s another consideration: if the item is used for both personal and professional use, you may only claim the portion used for work.
You’ll also need to keep clear records to prove it—or risk the ATO disallowing your claim.
Timing isn’t everything
It’s tempting to scramble for purchases before 30 June to ‘get the deduction in this year’.
But Lennon cautions that this mindset can be misleading. ‘You’re just playing with the timing,’ she explains. ‘We’re not actually saving or minimising. We’re delaying.’
If you do not urgently need the item, there’s no need to panic-buy. If bought after 30 June, the deduction simply applies to the next financial year.
Are the sales really that good?
EOFY can indeed deliver real savings. Consumer advocacy group CHOICE has found discounts of up to 80 per cent during this period.
However, not every offer is as great as it seems. Some come with conditions such as joining loyalty programs or other hoops to jump through.
And with other sales events like Black Friday and major online promotions rising in popularity, EOFY may no longer be the only time to secure a deal.
The Australian Bureau of Statistics has also reported weaker-than-usual spending in recent years, as shoppers spread their purchases across the calendar rather than waiting for June.
What can you actually claim?
To avoid making a costly mistake, keep in mind these key rules for claiming deductions:
- The expense must be directly related to earning your income
- You must have proof of purchase (such as a receipt)
- You can only claim the work-related portion of any item used for both personal and professional purposes
- Don’t claim anything you don’t genuinely need for work
If you’re unsure, visit the ATO website or consult a registered tax agent.
EOFY: A good time to review your finances
Beyond the sales, EOFY is an ideal opportunity to assess your overall financial health.
Video Credit: @natlenno / TikTok
Check your superannuation contributions, update your Centrelink entitlements—especially with changes due from 1 July—and review any deductions you may have overlooked, such as home office expenses, work-related travel, or eligible self-education costs.
Your turn: Have you fallen for the tax deduction trap?
Many of us have purchased items thinking they’d give us a big return—only to find the benefit wasn’t quite what we expected.
Have you ever made an EOFY purchase purely for the tax deduction? Or have you landed a genuine deal that made a lasting difference to your work or daily routine?
We’d love to hear your stories and insights—share them in the comments below and help others make smarter financial decisions this tax time.
Also read: ATO alert: How to keep your $1,537 safe from tax scammers
