POLL: How will you be using your tax return this year?
NEARLY half of Australian taxpayers are expected to save their tax return this financial year, according to a new survey.
A finder.com.au study found 46 per cent of Australians will save the money they get back with their tax return in 2018.
The consumer survey of 2,003 Australians showed 15 per cent more taxpayers planned to put their tax return straight into their savings accountc compared to in 2017.
An analysis of the Australian Taxation Office's myTax online lodgement figures showed this equated to about $2,800 of savings per person.
The survey found 17 per cent would use the saved money to pay off household bills.
Another 11 per cent of survey participants would put the money toward a holiday.
How will you use your 2018 tax return?
Seven per cent will use the savings to make extra mortgage repayments and a small proportion (5 per cent) plan to invest it.
Bessie Hassan, Money Expert at finder.com.au, said for some people tax time brought a long-awaited-for cash boost.
"Getting cash back means you may have overpaid in taxes during the year, so it can be bittersweet, but most people look forward to the extra cash," she said.
"Your tax return is money you've worked hard for throughout the financial year for so it can be tempting to want to spend it the minute you receive it.
"However, depositing your refund into a high-interest savings account like so many Australians are planning to do this year, can really help improve your overall financial health," she says.
Alarmingly, the finder.com.au study found that 84 per cent of homeowners who had a mortgage wouldn't be using their tax return to make extra repayments on their home loan.
Ms Hassan explained using your tax return to chip away at existing bills or debt repayments such as a mortgage was one of the smartest ways to use the cash.
"Using your tax return to make extra mortgage repayments could have a sizeable impact on the size and length of your loan, meaning you could potentially own your home outright sooner," she says.
Using the average ABS home loan of $399,200 with 5.06% standard variable rate interest, homeowners who pay $250 extra on their monthly repayments, could save over $55,000 on their 30 year home loan.
Generation X (those aged 39-58) and Generation Y (those aged 24-38) were more likely to make extra mortgage payments (13 per cent and 12 per cent respectively), than Baby Boomers (59+) who only had a 5 per cent likelihood of making extra mortgage payments.