Get more from this year’s tax refund

IT LOOKS like we’re a nation of savers, with one in three Australians planning to save their tax refund. It’s a smart move, but there are plenty of other ways to supersize the value from your tax refund.

Comparison site Finder says eight out of 10 of us are expecting a tax refund, and with the Tax Office handing back $28 billion in personal refunds last year alone, it’s fair to say plenty of workers will pocket a tidy windfall.

The big question is what do you do with your refund?

According to Finder research, 31% of us will save the cash, and 10% will use it to pay a bit extra off their mortgage.

These are both sensible strategies. However, with interest rates so low on deposit accounts and home loans, there are other ways to use a tax refund to enjoy more bang for your buck.

If you’re carrying a high-interest credit card debt, it can be worth using your refund to pay down the balance. Some cards charge rates of 20%-plus, so you’ll

❝ Make putting your tax refund to work an annual habit

save far more on interest than by paying down your home loan. Turbocharge the savings by shopping around for a low-rate card.

Another option is to boost your super with a personal after-tax contribution. Or, if you’re in a relationship, consider making a contribution to your other half’s super fund. You could be eligible for the 18% spouse super tax offset worth up to $540.

Since July 1 the spouse super offset is available if your spouse or partner earns up to $37,000 annually (phasing out altogether at $40,000).

Your tax refund can also be a source of cash to take out income protection insurance. This type of cover provides replacement income usually worth around 75% of your current wage or salary if you can’t work because of illness or injury. The premiums are normally tax deductible.

Or, put your refund to work by kick-starting an investment portfolio. If you’re not confident investing directly, think about a managed investment fund. There’s plenty to choose from including funds that focus on Australian shares, property, global shares or a mix of investments across the spectrum.

It’s possible to get started with as little as $1500, which may be less than your tax refund. Then build on your portfolio with a regular investment plan.

Make putting your tax refund to work an annual habit, and enjoy improved financial security each year.