Responsible things to do with your tax refund
The end of the exercise is upon us. As we all scramble to get our taxes and expenses sorted for tax time, it’s easy to get swayed by some of the massive EOFY deals that are popping up right now to try and tear us away from our hard-earned tax returns. It’s a cliché to buy something fun like a brand new 4K TV with your cash injection, but there are much more responsible ways to spend that money.
The items below may not be the flashiest ways to spend your new money, but they are definitely the safest things you can do for your future and that of your family. We’ve compiled some of the most responsible things to do with your tax refund, so you can start fiscal 2023 in the right direction.
Make large work-related purchases
Big work expenses like computers, tools, and software are things that inevitably need to be replaced. Under the Australian tax system, work-related items that cost you more than A$300 must be depreciated over the “effective life” of the item. If you purchase these items at the end of a fiscal year, the benefit on your next tax return will be very small. However, a tip any accountant will tell you is that if you buy the item at the beginning of the year – July or August – this depreciation assessment will cover more time and this will result in a larger deduction on your next income tax return. income.
Audit your internet security
Regularly auditing the security of your technology is the best way to ensure that you are protected. As a work-related expense, a new fiscal year is the perfect time to do this and put yourself on a yearly security cycle. Whether you work from home or not, chances are you are accessing sensitive data on your personal devices. A holistic internet security suite like PCMag Editors’ Choice Bitdefender Total Security is the easiest way to ensure that all your bases are covered when it comes to your home’s online security. It provides top-of-the-line threat detection with minimal impact on your system performance, with some nice features like camera/microphone security and VPN included with a data allowance of 200MB per day/device for secure browsing.
An important factor to also consider is whether your family/roommates have brought any new devices to your network in the past year. If so, it might be worth combining into a multi-device bundle like Bitdefender’s Family Pack. Although the price of a simple personal protection plan increases, if you work from home (even part-time or out of hours), security suite and antivirus subscriptions can be considered work-related expenses, even if it is only a percentage. cost proportional to the amount of work you do at home. If you do your own Australian tax returns, these subscriptions would fall under “other work-related deductions”.
Repay outstanding debts
If you have major credit card or personal loan debt that doesn’t seem to go away, consider using your tax refund to reduce those debts or (if you can) pay them off entirely. Once you are debt-free, you can finally start using your money for yourself, rather than contributing to the profits of a big bank. This could mean that next year you won’t have to be so responsible for your tax refund and you can make other purchases of personal items guilt-free. Alternatively, if you want to keep up the good work and build good habits, you can do the one thing that all responsible people do with their disposable income…
We know that’s not what you want to hear. There’s nothing satisfying about putting that money away after trying so hard to file your taxes properly and watching your paychecks tax month after month. However, it was Einstein who (allegedly) once claimed that the greatest force in the world is “compound interest”. Put that money in a savings account or low-risk investment and thank yourself years in the future for your withholding.