Use your tax refund to clear – or at least reduce – any debts attracting high interest rates such as store cards, credit cards or personal loans. Even a small payment goes a long way to bring down your outstanding balance and reduce the amount of interest charged. If you haven’t got any short-term debts, consider putting your tax refund into your bond or car finance.
‘A penny saved is a penny earned’ or so the adage goes. Although in South Africa we deal in Rands and cents the sentiment remains the same. Use your tax refund to boost your existing savings account – or better yet, open one if you’re not putting money away. With the new Tax-Free Savings Accounts, available through most large financial institutions, you’re able to invest up to R30,000 per tax year (to a maximum of R500,000 in your lifetime) and not pay tax on any interest earned.
Quality education is expensive and often out of reach for the average South African. It’s said that knowledge can never be taken from you and so it’s a fantastic investment to make. Perhaps you’ve been wanting to further your career, finish that lingering degree or simply broaden your horizons on a new topic that interests you. Use your tax return to pay for a book, short course or towards a longer term tuition for either you or your children. Your future self will thank you.
If you’re fortunate enough to own property, you can use your tax refund to add value to one of your primary assets by looking at those renovation or extension plans you’ve been putting off. A great investment would be a gas stove or solar panels to reduce your electricity bill in the long term. Maybe the kids have been nagging you for that splash pool to be ready for the summer sun. Or perhaps you’ve considered building a ‘granny flat’ to earn rental income. Any enhancement to your property adds value to your future potential selling price, and gives you the pleasure of a lovely home in the interim.
Do you have a burning business idea? Perhaps you’re sitting on the next best app? Or you’ve spotted a ground-breaking gap in your industry? Use your tax refund as seed capital for your new venture. Doing so will secure you income for years to come, plus you’ll be able to claim deductions for your small business on your next income tax return! (Remember that if you’re running a local business as a sole proprietor, i.e. in your personal name, you’ll need to register for Provisional Tax too.)
Has the travel bug bitten? Put your tax refund towards a trip you’ve always wanted to make – whether it’s local or abroad. Money won’t last, but memories and experiences do and exploring new places and cultures is often high up on one’s bucket list. Make those travel dreams come true, thanks to the taxman.
Fancy yourself a bit of an adrenaline junkie but without the funds to get your fix? Extreme sports and activities generally come with a steep price tag. Whether it’s a helicopter flip, cage-diving with sharks, bungie jumping, sky-diving, kite boarding, or even a white-river rafting trip, you can use your tax return to fund an adventure of a lifetime.
If you didn’t use TaxTim to help you complete and file your tax return quickly, easily and correctly, there’s a good chance you’ve got some tension built up in your body and you could do with a relaxing day at the spa. Spoil yourself (and your partner or best friend) to a therapeutic massage, manicure, pedicure or body treatment to ease the stress. If the spa isn’t your idea of fun, perhaps visit a salon and try out a new hair style or colour.
If you’re like most South Africans, you’re having to stick to a strict monthly spending budget. As the price of basic living expenses continues to escalate, disposable income for those little ‘luxuries’ in life has become more difficult to come by. What better way to reward yourself for all your good spending behaviour than to splash out on that big ticket item you’ve had your eye on for months? Whether that’s the latest technology gadget on the market, a new lounge suite or a pair of exclusive Italian shoes is up to you!
Lastly, the least ‘selfish’ of the splurge suggestions – you could use your tax refund to make someone else’s day. Perhaps you have a charitable organisation close to your heart – such as a children’s home, animal shelter, or a community centre – that could desperately do with some funds to continue the service they provide to others. (Remember if they’re a registered NGO, you can add your donation as a tax deduction!) Or maybe it’s a random act of kindness, dishing out care packages to homeless people or even just helping out a friend who needs a little financial breather. They do, after all, say it’s better to give than to receive.
If you haven’t received a tax refund this year, take heart. While a tax refund is often seen as a bonus or benefit, it’s actually nothing more than a personal loan payment back from SARS at 0% interest! They’re only issued when a taxpayer has paid more tax than needed throughout the year, based on their overall earnings less all claimable deductions, and therefore they’re really just giving you back your own money. Something to consider when you choose how to spend or save it!That said, TaxTim can help you to receive your maximum potential refund when assisting you to complete and file your tax return. The unique chat interface allows Tim to ask all the right questions to ensure that you’ve claimed for every deduction available to you – reducing your overall tax liability and maximising your refund, if due.