Larger tax returns for 18-19. What will you spend yours on?
It’s now mid-way through July so definitely time to start thinking about tax returns! Have you lodged yours with the ATO? Have you claimed all your deductions? Do you know how much tax you’ve paid? How do you know that you’re getting the biggest return possible?
It’s always good to stay in the know with tax returns so that you get the most back that you possibly can. Even something as simple as a new pair of shoes might be tax deductible! The ATO has a helpful list of what you can claim based on your occupation (found here), and it comes in handy to know, so that you can maximise your tax return.
Maybe you’re not entirely sure how much tax you’ve even paid? This is where knowing your brackets comes in handy. Tax brackets are marginal, so your tax only increases as your income does. What this means is that if you earn, for example, $82,000, your first $18,200 is not taxed. After that, your next $18,800 is taxed at 19%, meaning you pay $3,572. Your next $43,000 is taxed at 32.5%, for a paid amount of $13,975, and finally your last $5,000 will be taxed at 37%, for an amount of $1,850. Now this may all seem confusing, but in essence this means that your total tax paid is equal to $19,397. Marginal tax brackets may seem confusing, but are handy to know when you’re lodging a return.
Or maybe you’re lacking in inspiration for how to use your well-earned tax return? Of course, it might seem easy to dive head first into some EOFY sales, but here at Financial $olutions we think your money is better suited serving you in a way that garners return. There is a range of potential options for investing your tax return. Maybe you’d like to dive into the stock market, or maybe you’d like to set yourself up for the future? You can invest your money in any number of ways from a super fund to a term deposit, and know that your investment will serve you well!
For more information on how to understand tax, and how to lodge a return, consult ASIC’s MoneySmart guide, found here.
Unsure of your investment options or want advice on how best to use your tax return? Book an appointment and speak to one of our helpful advisers today and find out what investment options are best for you.