I spoke on Friday about Intaxication…if you missed it, you can read that post here.
But I was thinking over the weekend, and having a discussion about the topic with a friend…and I thought it was probably a good idea to suggest that you wait until you actually HAVE your tax refund in your hot little hand (ie: your bank account…) before you actually spend it!
I know the excitement that builds at the prospect of how much you might get back, but it’s not a tax refund until it’s actually been refunded!
For taxpayers who are in business, or have otherwise untaxed income (such as rental income, interest and dividends – where tax is not paid as you earn), I always recommend putting a little bit aside throughout the year so that you have enough to pay your tax liability, or to give yourself a “tax refund”, even if the Australian Taxation Office (ATO) don’t…a bit like forced saving!
For myself, I’ve done some calculations for the financial year just ended, so I have a good idea what the outcome will be when I complete my tax return…but I can assure you that I won’t be spending any refund until I actually receive it…I’ve got some ideas on what I want to do, but no action will take place!