Millions of Aussies awaiting critical $2900 payment as tax return season looms amid cost-of-living crisis
A new Finder survey asked 1077 Australians how they planned to spend their 2022-23 tax return in the coming months, and highlighted an over-reliance on the payment.
The average tax return injects about $2900 into an individuals bank account, Finder reports.
One in seven Australians equivalent to 3 million people and about $8 billion said they would be using the return to pay their bills.
Finder money expert Rebecca Pike called it a cash flow crisis.
Many are counting on their tax return to pay for everyday expenses and get them out of a tight spot, she said.
If youre waiting for your tax return to bail you out, you are likely living beyond your means.
One in eight Australians admit this years tax refund is critical to their financial health, the report states. Thats equivalent to 2.4 million people.
An additional 23 per cent of respondents almost one in four said the payment was very important for their budgets.
The majority of Australians (36 per cent) plan to put their tax return straight into their savings, according to the research, which estimates those 7.3 million people will cumulatively save about $20.8 billion this season.
Four per cent of Australians plan to use the money to pay off their credit card, and 19 per cent dont expect to get a tax refund at all this year.
Millions of Australians are awaiting their tax returns, considering the cash influx critical to their financial health. File image.
Credit:
Getty Images/EyeEm
But for some, a holiday or a shopping spree is still on the cards.
Five per cent of the survey respondents said they were planning a holiday with the money, and 3 per cent plan to go shopping.
Pike advises those with spare cash to invest the payment, to generate passive income and aid financial health in the future.
If you get a tax refund this year, it can be tempting to spend it all, Pike said.
But if you invest it strategically, you can generate passive income for years to come.
Put it in a high-yield savings account or jumpstart your investing journey to build wealth.
Pike also recommended claiming as many working from home expenses as possible for a higher return, despite the ATOs recent changes to available deductions.
H&R Block tax communications director Mark Chapman previously told 7NEWS.com.au the ATOs new working-from-home claiming method may mean the average taxpayer could lose about $629 in their future tax returns.
In the new fixed rate method used to calculate working from home expenses, people can claim 67 cents for each hour they work from home, which includes both mobile phone and internet expenses, where Chapman says the ATO will be on the look-out for double-dipping.
The typical Australian taxpayer working from home would have been able to claim $1379 under the old regime, but under the new method they stand to claim deductions around $750, Chapman said.