The time of the year where we make that annual pilgrimage to see our Accountant, shoe box in hand, hoping that we might get a nice surprise and leave with a wheel barrow full of cash. If only it was that easy……
For some, tax time means parting with more of their hard earned and paying a tax bill whilst for others this is the best time of the year where we have a windfall for the household. Let’s not forget the retirees who are still grinning like a Cheshire cats counting their franking credits, now there is an example of the good guys winning.
With all this in mind, I want to explore how we individually make the most of our end of year tax position and to challenge your way of thinking about how we can in fact make a difference with our respective tax outcome:
You are getting a refund!
That’s what I want to hear. Let’s face it, we all love a tax refund… So, how do we make the most of the annual windfall? Should we put the money in the bank, pay off some debt, add the money to super or partake in a serious amount of retail therapy?
In thinking about this all options are valid, admittedly some more exciting than others. Now I would forgive you if you thought I was about to write, be sensible and invest your money, however today I have been inspired by one of my colleagues, Brett.
Brett, has done his bit for Australia, he has used his tax refund to purchase a new weber bbq and a pair of the Australian icon, RM Williams Boots. On a side note, the joy of purchasing a pair of RM Williams boots is a discussion to be had on another day, as for mine this is one of life’s great pleasures. I digress, both of Brett’s purchases are big ticket items and items that keep on giving.
Whilst, the fun police would scoff at this thought, I for one think it is brilliant, brilliant in more ways than one. Brilliant for the fact that life surely must give you some gifts along the way and this is a genuine gift that Brett has given himself.
Secondly, brilliant for the fact that Brett has given a gift to the Australian economy. As it stands, the Australian economy is on the canvas and the ref has just tapped once, enter the Reserve Bank of Australia with two interest rate cuts to spark some much-needed life back into the economy. Now these interest rate cuts will take some time to lift the economy off the canvas, so it’s up to us to each do our part and speed up the process of making our economy flourish again. So how do we do that, we each spend a bit and inject a shot in the arm of the economy, so whether that is a pair of RM Williams boots, a mini escape or a trip to Myer, we can all make a difference.
So my advice to you, spoil yourself this year with your tax refund.
You have to pay tax!?!
Now this is the news that none of us want to hear and is normally followed by images of stabbing your Accountant in the neck.
After receiving that blow, how do you feel as though you can have a win? Well the only answer is defer lodging your tax return. Just because you have completed your tax return, it does not mean you have to have this lodged immediately. In actual fact you have until May 15, 2020 to lodge your tax return, so my advice, defer lodgement and in doing so, defer the payment of that dreaded tax bill.
So should you fall on the unlucky side of the tax ledger but still want to do your part for the economy? Put your tax money to work until May and deploy the interest from your tax monies into the economy, now this might not get you that pair of RM Williams boots, however it will surely allow you to have a nice dinner in town.
So in conclusion, Benjamin Franklin once said “there is nothing certain except death and taxes” which rings as true as ever today. However, whilst we are alive we have the choice to find some happy ground between death and taxes and do our part for Australia. So go on, follow Brett’s lead and spoil yourself and who knows, we might find Australia in a healthier space as a result!