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Aussies more conservative with tax returns amid COVID pandemic
Over a quarter of Australians are looking to pay off outstanding bills with their tax returns, according to new research.
Aussies more conservative with tax returns amid COVID pandemic
Over a quarter of Australians are looking to pay off outstanding bills with their tax returns, according to new research.
After the economic shifts of the last 12 months, Australians are more likely than ever to spend their 2021 tax refunds on paying off outstanding bills.
According to a survey by accountant firm MYOB, 28 per cent of Australians are planning to use their tax refund to catch up on bills.
By comparison, 23 per cent of Australians surveyed by MYOB said they planned to invest the money. Another 10 per cent said they planned to spend it on a holiday, while just 4 per cent said they’d spend it on ‘something frivolous’.
Earlier this week, the Australian Taxation Office revealed it had received 1.7 million tax refunds and paid out around $1 billion to taxpayer bank accounts.
With an average refund amount of $2,490, the ATO estimated that a total of $5.3 billion has already arrived in the bank accounts of Australian taxpayers.
MYOB’s research also highlighted the prominence of tax-time stress among Australians.
Their research found that 31 per cent of Australians are worried about the responsibilities and rigmarole associated with the end of the financial year.
Making a mistake with your tax return was cited as the most common concern at 41 per cent.
General confusion about the tax return process ranked second at 40 per cent while specific confusion about what can and can’t be claimed came third at 38 per cent.
Jacqueline Lim, MYOB’s tax specialist, predicted that the changes brought about by COVID-19 mean this will be a different tax year for many Australians.
She said that one in five Australians surveyed by MYOB said their income in the 2020-2021 financial year would be lower than usual, with 61 per cent attributing the loss of income to the COVID-19 pandemic.
While the end of the financial year can be “daunting for many”, she noted that only 43 per cent of Australians surveyed by MYOB used an accountant or tax agent to manage their tax obligations.
“A tax agent can assist with the record-keeping requirements and by explaining what expenses can be claimed. Speaking to a specialist could be worthwhile to maximise your return,” she said.
“For individuals lodging their own tax return, it’s important to remember the 31 October deadline, if this is missed, it can lead to financial penalties. Also ensure any tax owed is paid on time to avoid interest charges from the ATO.”
“If you expect a tax refund this year, consider lodging online, as the refund process is faster and money is deposited directly into your bank account,” Ms Lim added.
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