How much will I get back from my taxes?

Money & Life

The Australian Taxation Office (ATO) refunds billions of dollars to over three quarters of all taxpayers annually, but it takes a little effort to ensure you get as much tax back as you can. But while Australian taxpayers receive on average around $2,5001 in tax refunds annually, there’s no guarantee two people earning the same income, will receive the same tax refund.

The key points are as follow :

  • Getting your financial house in order

  • The key variables

  • Super, investment costs or other items 

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2018-19 saw a rough ride for investors, but it turned out okay.

The past financial year saw a roller coaster ride for investors. Share markets plunged into Christmas only to rebound over the last six months. This note reviews the last financial year and takes a look at the investment outlook for 2019-20.

Key Points

  • 2018-19 saw solid returns for diversified investors, helped by a sharp rise in share markets in the last six months & solid returns from most assets, except cash.

  • Key lessons for investors from the last financial year were to: turn down the noise around investment markets, maintain a well-diversified portfolio; and cash continues to provide low returns.

  • A pick-up in global growth, renewed monetary easing, an absence of significant economic excess globally and okay equity valuations should support returns over the year ahead. But they are likely to be constrained with bouts of volatility as the US trade conflict impacts and risk remains around the Australian property market.

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Time is running out, will your super be affected on 1 July?

Get ready, there are changes coming to superannuation on 1 July that’s likely to affect three million Aussies – are you one of them?

The chances are you will be, if either your employer or you haven’t contributed to your super account for the last 16 months or more. If that’s you, then the changes mean that any insurance cover currently in place within your inactive super accounts will be switched off. Put simply, you lose your insurance coverage.

Your available options:

  1. If your super account is active and is regularly receiving contributions, either by you or your employer, then the good news is that your insurance won’t be affected by these changes. So, relax, there’s nothing to worry about. It’s business as usual.

  2. If your super account has been inactive for 16 months or more, then you have two options:

    • You can choose to keep your insurance but you will need to contact your super fund before 1 July and let them know. Your fund will probably ask you to formalise your request by putting it in writing, either via completing a form on the fund’s website, responding to a text message or sending an email; or

    • Simply let your insurance cover lapse on your inactive super account. Once you’ve made this decision, you don’t have to do anything.

Do you need insurance?

Choosing whether to have insurance or not through your super is very much a personal decision. There are a number of factors you need to consider like:

  • how much debt do I have;

  • how do I service that debt due to illness, incapacity or death;

  • how much does my family need to maintain their lifestyle; and

  • what conditions are covered, or not, by the policies I am considering.

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Insurance through super

This article explains what types of life insurance you can get through your super and the pros and cons of this type of insurance.

The key point are as follow ":

  • What types of life insurance are offered by super funds?

  • Why get life insurance through your super?

  • How to check the insurance you have through super

  • Claiming on insurance through super

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Australian growth will be constrained but here’s nine reasons why recession is unlikely

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Dr Shane Oliver
Head of Investment Strategy and Economics and Chief Economist, AMP Capital

For some time our view has been a less upbeat on the Australian economy than the consensus and notably the RBA. The reasons were simple. The housing cycle has turned down and this is weighing on consumer spending. And this is at a time when the risks to the global economy have increased as the trade war threat has ramped up again. All at a time when high levels of underemployment are keeping a lid on wages growth and, along with technology and competition, inflation

But the gloom around the Australian economy seems to have gone over the top lately with all the talk around rate cuts adding to the sense of malaise and more and more talk about a recession being inevitable. There must be some positives around. And there are! So, to inject some balance into the debate around Australia here is a list of positives. They are partly why we don’t see Australia as being about to plunge into recession.

The key points are as follows:

  • Australia’s current accounts deficit has collapsed

  • The Australian Dollar helps stabilise the economy

  • The drag from falling mining investment is over

  • There is scope for extra fiscal stimulus

  • Infrastructure spending is booming

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The $A still has more downside, but a lot of the weakness is behind us

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Dr Shane Oliver
Head of Investment Strategy and Economics and Chief Economist, AMP Capital

While some have expressed surprise at the recent resilience in the value of the Australian dollar around the $US0.69-0.70 level despite weak Australian growth and Reserve Bank rate cuts, from a big picture sense it has already fallen a long way. It’s down 37% from a multi-decade high of $US1.10 in 2011 and it’s down 15% from a high in January last year of $US0.81. So, having met our long-held expectation for a fall to around or just below $US0.70 and given its recent resilience now is an appropriate time to take a look at its outlook.

The key points are as follows:

  • The Australian dollar likely faces more downside as Australian growth is weaker than US growth and the RBA is likely to cut more than the Fed. However, downside may be limited to around $US0.65 given that the $A has already had a large fall, short positions in the $A are large, the iron ore price remains high (for now) and the Fed is also heading towards rate cuts.

  • Given the downside risks for the $A and that being short the $A is a good hedge against threats to the global outlook it still makes sense for Australian investors to maintain a decent exposure to foreign currency via un-hedged global investments.

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Say goodbye to tax troubles

Do you find yourself drowning in random receipts when EOFY comes around? Learn to lodge your tax return the easy way with these last-minute and longer-term tax hacks.

Tax paperwork is something few of us take in our stride. In fact, the majority of people hand over much of this responsibility to someone more qualified. In the 2016/17 financial year almost three-quarters of Australians lodged their return via their tax agent. But even your accountant can’t do it all for you. Gathering together receipts and records you need to pass along can become a headache when you leave it all to the last minute.

The key points are as follows:

  • Maximize deductions

  • Be super savvy

  • Know your offsets

  • Investment costs

  • Tidy up for next time

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The nine most important things I have learned about investing over the past 35 years

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Dr Shane Oliver
AMP Capital

I have been working in and around investment markets for 35 years now. A lot has happened over that time. The 1987 crash, the recession Australia had to have, the Asian crisis, the tech boom/tech wreck, the mining boom, the Global Financial Crisis, the Eurozone crisis. Financial deregulation, financial reregulation. The end of the cold war, US domination, the rise of Asia and then China. And so on. But as someone once observed the more things change the more they stay the same. 

The key points are as follows:

  • There is always a cycle

  • The crowd gets it wrong at extremes

  • What you pay for an investment matters a lot

  • Getting markets right is not as easy as you think

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Is this your year to retire?

If you’ve got retirement in your sights this year, we’ve got the ultimate checklist to help you retire in style. Discover how to prepare for this exciting new chapter in your life, safe in the knowledge that your finances will be taking care of you.

The key points are as follow :

  • Explore your goals and make plans

  • Work on your budget

  • Reduce your debts

  • Budget for big ticket items

  • Check your eligibility for government benefits and super

  • Find out about tax

  • Make a retirement income timeline

  • Take care of family matters

  • Find the right financial planner for you

  • Plan to be in the best of health

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Your retirement income options

When you leave work for good and retire, where will your money come from? Discover your income stream options for covering living costs in retirement.

The main points are as follow :

  1. Account-based pensions

  2. Annuities

  3. Other investments

  4. Age Pension and other Centrelink benefits

  5. Working part-time

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How to budget: Your five step plan to brilliant budgeting

Budgeting doesn’t have to be complicated. In this guide you’ll find a simple five-step guide to becoming brilliant at budgeting so you can start saving and spending to achieve your personal and financial goals.

The key points are as follow :

  1. The right mindset

  2. Money in, money out

  3. Organise your accounts

  4. Get strict on spending

  5. Team up and keep going

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9 steps to a better retirement at any age

The key points are as follow :

In your 40s: time to start planning

  1. Work out what you’ll need

  2. Sort out your super

  3. Manage your debt

If you're aged between 55 and 65: transitioning to retirement

  1. Work out a practical retirement plan

  2. Boost your super

  3. Take greater control

If you're over 65: time to act

  1. Think long-term

  2. Consider where you'll live

  3. Leave a legacy

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Your end of financial year checklist

The end of financial year has a way of creeping up and catching us unprepared. But this time you can be ready, with a to-do list of tasks that you can tick off as you go. For instance, now may be the perfect time to put a bit extra into your super before 1 July to make the most of the annual contribution caps. And if you’re a business owner, we’ve also got some useful tips to help you manage your financial obligations and plan for the year ahead.

So, as the countdown to 30 June begins, here’s our checklist to start you on your way.

 The key points are as follows:

  • Getting ready for the tax man

  • Sorting out your super

  • Taking care of business

  • Start the next financial year on the right foot

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Raising money confident kids

Set your kids up for financial success by teaching them about money and taking care of your own financial wellbeing.

 The key points are as follows:

  • What type of money parent are you?

  • Learning from ‘engaged’ money parents

  • How you can look after your own financial wellbeing and role model good money behaviour

  • Start a conversation today

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5 reasons to save for retirement

Saving for retirement might not seem important, especially when there’s the super guarantee and aged pension to fall back on. But employer contributions and government benefits may not keep you as comfortable in later life as you’d like. Here are 5 reasons to make saving for your super a priority in the coming year.

 The key points are as follows:

  1. You can expect to live longer

  2. You have a bucket list

  3. You don’t have a crystal ball

  4. You could save on your tax bill

  5. You can harness the power of compounding

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7 Steps to wealth and living well

In more than a decade working as a financial planner, Elliot Watson CFP® has met with hundreds of clients and learnt a great deal about what it takes to build a wealthier and happier life. Above all, he believes planning for a better future is as much about people as their money. Here Elliot shares 7 key insights into how you can transform your fortunes.

 The key points are as follows:

  1. Time is critically important

  2. No one has a crystal ball

  3. Cure yourself of debt

  4. Face the music, feel the pain

  5. Make the leap

  6. Being retirement ready

  7. Bring your ideas - and commitment

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Inflation undershoots in Australia

Dr Shane Oliver, AMP Capital.

Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help?And what does it mean for investors?

 The key points are as follows:

  1. Surprisingly low inflation in Australia has increased the pressure on the RBA to cut interest rates again.

  2. We continue to see the cash rate falling to 1% by year end and now see the first cut coming as soon as May.

  3. For investors, it’s going to remain a low interest rate environment for some time to come.

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Is working more the answer to your financial problems?

When working more means earning more, it makes sense to take that promotion or extra shift to get ahead financially. But when expenses go up and quality of life goes down, is the price you’re paying for longer hours too high?

 The key points are as follows:

  1. Where will you be spending more?

  2. What will you be missing out on?

  3. Could you be better off without earning more?

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