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5 Smart Ways To Use Your Tax Return

June 2018

Are you wondering what to do what your tax refund?

Some fresh ideas that could make you more financially comfortable.

This year, before you race off to the shops on a spending spree, consider a few smart ways to use your tax refund. As Australia’s biggest online tax agent service, we hear from lots of Australians (and accountants) about ways they plan to spend their tax refund. Here are a few of their ideas.

1. Super contribution top-up

According to ASIC, a single person who retires at 65 with a ‘modest’ lifestyle (with annual living expenses of about $23,000) will need $300,000 in today’s money to retire. Those who want a ‘comfortable’ lifestyle (with living expenses of $41,830 per year) will need at least $544,000 to retire.

For most of us, those are some big numbers. Boosting your super early-on means there’s more time for your super fund to grow.

Just contact your superannuation fund or advisor for advice and to learn how to transfer your 2017 tax refund into your super fund – your “future self” will thank you when you retire!

2. Buy work related equipment items that cost over $300 now, for a better deduction on next year’s return

If you’ve been holding off on purchasing any big-ticket work related items like computers, tools and work equipment, using your 2017 tax refund could be a good option.

Work related items that cost you more than $300 need to be depreciated over the “effective life” of the item. If you buy these items at the end of a financial year, the benefit on your next tax return will be very small. But if you buy the item early in the year – July or August – your depreciation calculation will cover more time and this means a bigger deduction on your next tax return. Your tax agent can help make that simple for you.


save your tax refund for your kids - Etax
Saving your tax refund for your kids could open up more education options in their future.

3. Save your tax refund in a term deposit for your children

You could set aside your tax refunds to cover future big-ticket expenses for your children. Put your refund into a lengthy term deposit and use it for their university education or first car.

When your children are older, you can give them a good leg-up without a hard hit to your wallet.

4. Pay off credit card debt or loans

Do you have a credit card debt or a personal loan you seem to be paying off forever?

Consider using your tax refund to lower your credit card debt or pay it off. Your interest repayments will drop as soon as you lower your outstanding balance. Once you’re debt free, start using your money for you, rather than contributing to the bank’s profits by paying credit card interest repayments.

5. Put your tax refund into a mortgage offset account

If you’ve got a mortgage, it’s likely your mortgage provider offers a mortgage offset option.

A mortgage offset is essentially a savings account. Instead of receiving interest on your savings each month, your offset account balance is subtracted from your outstanding mortgage loan balance to calculate the interest component of your mortgage payment.

You’ll end up paying less interest on your mortgage, leaving more money in your pocket. You can pay your home loan off quicker while your offset account balance is still free for you to use.

By Simone Gielis, Senior Tax Agent and General Manager at



This article is of a general nature only. Individuals deciding what to do with their tax refund or savings should consult a financial advisor for specific advice relevant to their own situation.

Before proceeding with any type of investment or savings option you should read the relevant product disclosure statement and consult an advisor as needed to determine whether the investment or service is right for you.

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