– making your tax refund bigger
Windfall gains wisdom will ensure that those unexpected financial benefits ‘keep on giving’ as they say. Such gains can arise from a variety of sources, but one that many of us relate to, is the annual tax refund.
Around August through October each year many of us will be receiving a refund from the ATO: this is not a generous gesture on behalf of the Tax Commissioner, it is a return to you of what you should have had working for you during the past year(s).
Now that you have it back under your control, we offer the following suggestions as to how you might make it worth more to you:
- Check that you have enough personal risk (life) insurance to provide peace of mind to your family that their financial future will be secure – and update it to an appropriate level;
- Reduce some of your personal debt (that has an interest cost that is not tax deductible for you);
- Deposit it into your mortgage account (as part of a debt recycling strategy);
- Buy a funeral bond (but note the MoneySmart alerts to the pitfalls of funeral insurance);
- Start a regular savings plan (preferably with a goal in mind for a financial outcome in the future);
- Make a non-concessional contribution to an eligible superannuation account;
- Make an eligible concessional contribution (tax deductible) to a superannuation account; or
- Gift it to a charity about which you have some conviction: philanthropy can be quite satisfying.
To explore these and other ideas relevant to your personal situation, contact a Continuum Financial Planners Pty Ltd adviser – using the Contact Us form on our website, or phoning our office (on 07-3241 3456) – and arrange a meeting now. We will take you through the examples of how each of these possible uses of the tax refund will make it of greater value to you and your family.
[This article was originally published in our August 2010 eNews: it has occasionally been refreshed and updated, most recently, in January 2019.]
