It’s tax time and everyone is asking; how much money I’ll get back this tax season?
If you are lucky enough to get some money back, what will you do with it? Well, the team at Piteo Accounting & Advisory have some suggestions for you to consider which don’t involve going out to buy the latest gadget or shoes!
Here are our best ways to spend your tax refund;
1. Pay off any debts
Clearing or reducing any debts like credit cards or personal loans can feel liberating. These debts sometimes feel like they aren’t going anywhere and can take a toll on your mental health and wellbeing. When you use your tax refund to pay off any debts, this could help alleviate some of your financial pressure over the coming months or years.
2. Make an additional payment towards your mortgage
We don’t need to tell you what REALLY owning your own home feels like. While this year’s contribution may not make a huge difference right now, taking this approach year upon year could see you paying off your mortgage sooner.
If you have a mortgage offset account, consider adding these additional contributions to that account. By taking this approach, you could pay off your home loan faster and pay less in interest charges while still having access to the money in your account if you really need it.
3. Invest in your retirement
Have you considered your lifestyle come time to retire? ASFA estimates that to support a comfortable lifestyle, we’ll need around $640,000 for a couple and $545,000 for a single person at the time of retirement. (This assumes a partial Age Pension.)
When you boost your super now, there’s more time for you super savings to grow come retirement time. It’s as easy as contacting your super fund or advisor!
4. Buy now for a better deduction next year
Buying big-ticket, work-related items over $300 now could benefit your tax return next year. These items need to be depreciated over the “effective life” of the item. Buying these items in July or August, means your depreciation calculation will cover more time resulting in a bigger deduction on your next tax return.
5. Save for later or a rainy day
Save your refund in a long term deposit or another safe long-term, interest-earning investment – later you can use it for yourself or for your kids.
6. Donate to a charity
If you want to give away your tax refund, give it to a person in need, or a charity. Helping those in need can make you feel more content and fulfilled. Research has even shown that there is a link between making a donation to charity and feeling joy.
If want to maximise your tax return this end of financial year, consider using an accountant or talk to the team at Piteo Accounting & Advisory.
Disclaimer
This article is of a general nature only. Individuals deciding what to do with their tax refund or savings should consult a financial advisor for specific advice relevant to their own situation. Before proceeding with any type of investment or savings option you should read the relevant product disclosure statement and consult an advisor as needed to determine whether the investment or service is right for you.
