There’s nothing quite like the joy of getting cash back on your tax return. It might feel like free money, but you earned every cent, so make sure you use it wisely. Here are our top tips on how to get the best return on your tax return.
The early bird catches the first return.
Do you tend to leave things until the last minute? We feel you. This blog post was due half an hour ago. But when it comes to submitting your tax return, it’s best to get in early. Because getting in early means you’ll reap the benefits of an early refund. And it’s a great help when you’re paying off credit card debt, personal loans, mortgages or outstanding bills.
Be a super saver.
According to the retirement standard of the Association of Superannuation Funds of Australia (ASFA for those of you playing along at home), to have a comfortable retirement, single people needs $545,000 in retirement savings, and couples need $640,000. Contributing to your super early means more time for your super savings to grow so you could enjoy a more comfortable retirement. Check the contribution limits and contact your super fund for information about how to transfer your tax refund into your super. Your future self may appreciate it. Tell them to send us a postcard from the Croatian coastline.
Use your tax refund to pay off those niggling debts that seem to hang around forever. And once you’re debt-free, you can feel great knowing that your money is going to you, rather than the financier. Make sure you check if there is an early termination or break cost associated with your debt before paying it off. It’s important to have the full picture so you can work out what is right for you.
No, we’re not kidding. The beginning of the financial year is the perfect time to splash out on big-ticket work-related items that cost over $300, like computers, tools and equipment. These items can be claimed the relevant portion used for work purposes as a depreciation deduction in your tax return.
Pay off your mortgage faster.
Pay less interest on your mortgage and pay off your home loan faster by putting your tax refund in a mortgage offset account.
Think of the children.
Kids are expensive. Violin lessons and rainbow-coloured cereal don’t come cheap. If you have them or think you might one day, it’s a good idea to start saving now. Put your tax refunds into a savings account every year and you can use it later for your kids’ education or first car. And if you don’t have kids, you can spend those savings on your dream holiday. Either way you’re winning.
Need a break from finances? Book a holiday.
Again, not joking. Around 2.1 million Australians plan to shop for holidays during the EOFY sales in June. The best way to score a deal is by being flexible with your travel dates and destination.
Invest in a new set of wheels.
If you’re thinking about buying a car, the EOFY sales is a great time to save money as dealers are battling to attract more customers before the close of the year. If you need finance for your new car make sure you take time to compare car loans from different lenders, so you get one that suits your finances.
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