Once you have lodged your tax return, refunds are usually issued within 12 business days when lodged online, or up to 50 business days if lodged with an accountant offline.
On average, Australian’s receive a tax refund of $3,630. But what do we do with it? The Australian Taxation Office (ATO) reports that in 2014/2015 Australians spent their tax refund in the following way; 31% of people saved it, 29% paid off a loan, credit card or mortgage, 24% paid bills, 7% went on holiday, 7% spent it on other things, and 2% spent it on household appliances.
What should we really do with our tax refund when we receive it? The ATO recommends you spend your hard earned tax return the following three ways:
- Lighten your debt load by paying off your credit cards, personal loans, mortgage, outstanding bills or fines. By paying off your debts, you will reduce your interest. A tax refund is a great way to make headway on your debts hopefully relieving some stress.
- Stash it away for emergencies or unplanned costs. Add your tax return to your super or retirement account; this is a smart and simple way to boost the amount of money you have to retire on. Another option is to put the money into a high interest savings account and start a new savings plan, that way; your money will grow with compounded interest.
- Reward yourself by investing in your personal or professional development. Attend night or weekend classes and learn a new skill. An investment in your education is an investment in your future.
Tax Tip Tuesday is brought to you by Nudge Accounting. For more great tax tips click here.