{"id":1590,"date":"2018-01-03T17:30:12","date_gmt":"2018-01-03T06:30:12","guid":{"rendered":"https:\/\/cruzandco.com.au\/?p=1590"},"modified":"2018-01-03T12:25:11","modified_gmt":"2018-01-03T01:25:11","slug":"double-tax-refund","status":"publish","type":"post","link":"https:\/\/cruzandco.com.au\/double-tax-refund\/","title":{"rendered":"How to Double Your Tax Refund"},"content":{"rendered":"
By\u00a0Nicole Pedersen-McKinnon<\/strong><\/p>\n <\/a>Will the prospect of a $2564 refund motivate you to finally do your tax return, if you haven’t already?<\/p>\n That’s the average paid back for the latest full year for which figures are available, 2014-2015, and Australian Tax Office Assistant Commissioner Kath Anderson says refunds are tracking similarly this year.<\/p>\n What’s more, 78 per cent of taxpayers \u2013 some 10 million Aussies \u2013 typically get one.<\/p>\n As the October 31 tax deadline looms large, here’s how you could turn the average $2564 refund into even more money.<\/p>\n The average Aussie can treat the typical refund as a free kick to chunk off a fair amount of the mean credit card debt, which moneysmart.gov.au says is $4090.<\/p>\n At an average mozo-calculated interest rate of 17.21 per cent, repaying $2564 will save $7109 versus making only minimum monthly repayments of 2 or 2.5 per cent of your balance \u2013 and get you out of debt more than 20 years sooner.<\/p>\n Except I’m going to assume Money\u00a0<\/em>readers know that minimum repayments are set so ”helpfully” low to trap card holders in debt as long as possible, and see them repay a fortune.<\/p>\n Even those who today manage to tip $300 a month onto their card, however, stand to save $2713 in interest (and 10 months) by instead using their refund to ditch the debt.<\/p>\n A quick clever trick this one \u2026 if you earn below $51,021, whack $1000 of your refund straight into super and you’ll snare a bonus up to $500 from the government.<\/p>\n This is under the co-contribution scheme, so the money goes directly into your super fund and you can get at it when you reach preservation age between 55 and 60.<\/p>\n Don’t forget there’s still more than $1500 of your refund to build on today, too.<\/p>\n You did well with the credit card strategy above but throw your $2564 refund against a mortgage and, due to its sheer size, you take that to a new level.<\/p>\n Stop letting the tax office use your money for most of a year, before you get it back.<\/p><\/blockquote>\n If you’re on the average big bank advertised rate of 5.23 per cent for the average $370,500 Aussie mortgage \u2013 with apologies for ruining the mornings of Sydney-siders and Melbourne-ites \u2013 you’ll save $6348 in interest (a $3784 net saving).<\/p>\n At which point more than $2000 extra each month \u2013 your repayments \u2013 becomes yours!<\/p>\n There is also a beautiful thing when you use money to\u00a0repay\u00a0<\/em>any debt; because you only ”effectively’ earn returns, they’re not just risk-free but also tax-free (you’re\u00a0actually<\/em>\u00a0saving money).<\/p>\n Stash $2564 cash into an online account and you’ll earn 3 per cent a year but\u00a0you’ll have to be a rate tart<\/a>.<\/p>\n At those paltry rates, without adding another cent, you’ll double your money in 23 years (and hopefully rates will increase over the period).<\/p>\n But find an investment that will deliver a total annual return of 8 per cent (bearing in mind investments come with the risk of losing money), and you’ll double your money in just under nine years.<\/p>\n Were you slugged with a penalty for not having health insurance last year (the Medicare Levy Surcharge)? Then consider buying some \u2013 early in the tax year, so you actually get covered for the cost.<\/p>\n Do this by age 31 or you’ll pay more as well.<\/p>\nSnare the same amount again<\/h3>\n
Boost your ‘refund’ by $500<\/h3>\n
Lift it by 50 per cent<\/h3>\n
Double your moolah<\/h3>\n
Get protected \u2026 which is priceless<\/h3>\n
Get smart with ATO<\/h3>\n