Money and Life
(Financial Planning Association of Australia)

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 $2,500 in tax refunds annually, there's no guarantee two people earning the same income, will receive the same tax refund.

That's because many Australians fail to maximise their tax deductions they're legally entitled to, and even worse, ATO estimates around 200,000 taxpayers who failed to lodge tax returns last year, would have received a refund.

Getting your financial house in order

While tax deductions are the easiest way to maximise your tax refund, there's some homework to be done to ensure you maximise the tax you get back.

Much of this homework revolves around good record keeping, to ensure everything you claim as a tax deduction is substantiated with a valid receipt. For example, if you're claiming driving expenses for a car that you own, make sure they're diarised along with dates and mileage. It's no different when you're claiming back charitable donations for any amount over $2, so make sure you retain all receipts.

The key variables

Most of the key variables that impact on how much tax you get back, revolve around legitimate work-related expenses that your employer hasn't already reimbursed you for.

If you're unsure of what's tax deductable, why not check what other people in your job are claiming as deductions? But regardless of the industry you're in, generally speaking, most deductions include expenses relating to:

• Vehicle and travel expenses for travel between work and home
• Clothing, laundry and dry-cleaning expenses
• Mobile phone, internet and home phone expenses
• Overtime meals
• Self-education expenses
• Tools, equipment and other equipment
• Other work-related deductions, like union fees and professional subscriptions
• Expenses incurred on things like heating, cooling, lighting while regularly working from home

If you're unsure about what work-related expenses you can claim, check out the ATO website.

Super, investment costs or other items

Another way to receive a bigger tax refund is either by making a personal contribution to your super or by adding to your spouse's fund before the end of the financial year. A maximum rebate can be achieved by contributing $3,000 into super.

Given that tax matters relating to investments are inherently complex, having a professional correctly review other investments can return in spades. For example, it may be appropriate to consider offsetting the loss you're carrying on any assets (like shares and units) against a profit made on the sale of others' assets, on which capital gains tax is now payable.

A timely review of the income protection insurance (you already have through your super), can also result in tax benefits. That's because a policy taken out in your own name (this financial year) can be claimed against assessable income, thereby potentially reducing the up-front cost of protecting your income. Similarly, if you earn more than $90,000 (singles) or $180,000 (families and couples), you can avoid the Medicare Levy Surcharge(calculated at the rate of 1% to 1.5% of your income) by having hospital cover, which in addition to providing the cover you need, may also be cheaper than the surcharge itself.

ACCC (Australian Competition & Consumer Commission) & SCAMWATCH

Scams reported to the ACCC involving identity theft or the loss of personal/banking information have cost Australians at least $16 million this year, and this figure is likely to be just the tip of the iceberg.

Four in 10 Scamwatch reports in 2019 involve attempts to gain information or the actual loss of victims' information.

"If you think scammers might have gained access to your personal information, even in a scam completely unrelated to your finances, immediately contact your bank," ACCC Deputy Chair Delia Rickard said.

"Timeliness in alerting your financial institution is absolutely crucial, and will give you the best possible chance at recovering your funds."

Some of the ways scammers obtain personal or banking information are:

• phishing emails and text messages which impersonate banks or utility providers seeking your login details
• fake online quizzes and surveys
• fake job advertisements
• remote access scams in which the scammer has direct access to everything on your computer
• sourcing information about you from social media platforms
• direct requests for scans of your driver's license or passport, often in the course of a dating and romance scam.

"No one is really selling an iPhone for $1, or rewarding the completion of a survey with expensive electronic goods or large gift vouchers. They're scams to get your valuable personal information," Ms Rickard said.

"The identity thieves can make victims' lives a nightmare. They'll change the victims' phone carrier so they lose service and set up mail redirections so they're in the dark about what's going on."

Scammers can empty victims' bank accounts, take out tens of thousands of dollars in bank loans under victims' names, and purchase expensive furniture or electronics under 'no-repayments for 12 months' schemes.

Lost personal information also leaves victims more susceptible to future scams. Scammers will use the victim's personal information to seem more convincing in cold calls.

"The trick is to be alert to the signs. If your mobile phone suddenly loses coverage, you haven't received expected electronic or physical mail, or you receive unexpected notifications from a financial institution, call your bank."

If you have been the victim of identity theft, contact IDCARE on 1300 432 273. IDCARE can guide you through the steps to reclaim your identity.

Money and Life
(Financial Planning Association of Australia)

How much do you need to save to make sure you have enough to last throughout retirement? It very much depends on what your living costs will be after leaving work.  Find out more about how to budget for the retirement income you'll need for the lifestyle you're planning for.

When you plan to retire will often be determined by whether you can afford to stop working and still have enough income to maintain your lifestyle. Latest figures from the Australian Bureau of Statistics show the majority of men (36%) and women (22%) chose to retire at the time when they became eligible to draw on their superannuation and/or the age pension. And their average age at retirement was 63.5 years.

If you're planning to delay retirement until your super balance reaches an amount you can comfortably live on, just how do you determine what that target should be? There are a number of factors that will affect how far your money will go, including your life expectancy, how your money is invested and other choices you make for managing your income. But one of the most important steps to planning for a secure financial future in retirement is to be realistic about your living costs.

How your living costs might change

As you stop working and have more time to yourself, your routine will change and you might save on some costs as a result. Spending on transport could fall as you no longer have to commute. If buying lunch and takeaway coffees has been a daily habit while working, you could also make significant savings by leaving these out of your retirement routine. Other living expenses, such as buying groceries and clothes and paying household bills are likely to be much the same before and after retirement.

Thinking about how you'll spend time in retirement and where you're planning to live will also give you clues about how your spending might go up or down. If a few trips overseas are on the cards, you'll need to allow for these occasional costs in your overall budget. But if you're planning to limit travel to domestic holidays only, then you won't need to allow for these expenses in your financial plan.

Start with a ballpark estimate

How much travel you plan to be doing is just one of the many daily and one-off costs taken into account in the Retirement Standard estimates for annual expenses. Updated every quarter by the Association of Superannuation Funds of Australia (ASFA), these figures can give you a rough idea of what you can expect to be spending day-to-day in retirement.

There are two estimates available, a higher one for a comfortable lifestyle and a lower amount for a modest lifestyle. As at December 2018, the amount you'd spend as a single person aged around 65 years enjoying a comfortable lifestyle is $43,317 and for a modest lifestyle the annual budget is $27,648. The estimate for couples is $60,977 and $39,775 for comfortable and modest lifestyles respectively.

To give you an idea of how differences between a modest and comfortable budget might impact on your retirement plans, the annual travel budget is a good place to start. A couple living modestly can expect to spend approximately $2,500, with no allowance for overseas trips. On a comfortable budget, a couple can splash out more than $5,000 each year on travel, with roughly a third going towards international travel.

The cost of lifestyle changes

Although it's wise to build a budget based on what you expect to be doing in early retirement, your overall plan should also take into account potential for lifestyle changes as you age. Travelling for longer periods, dining out and entertainment and taking part in sports and hobbies could taper off as you grow older. Health and aged care costs, on the other hand, could make up a larger share of your budget in the later years of retirement.

A plan to see you through retirement

Your expenses are just one side of the whole budget planning process. Taking a good look at all your retirement income options is just as important to figuring out how much you'll need and when you'll be ready to take that step. From the age pension to the equity in your home to retirement income products such as annuities and account based pensions, there are all sorts of ways to support yourself financially towards having the lifestyle you want.

Katina Curtis and Rebecca Gredley
(Australian Associated Press)

Australians earning up to $90,000 look set to get an extra $1000 back in tax within weeks, with the federal government on the verge of winning the Senate support it needs for stage one of its tax package.

The $158 billion package passed the lower house on Tuesday night after about three hours of debate, with Labor failing to secure an amendment to bring forward the second stage of the package.

Labor leader Anthony Albanese said it was a sensible proposition given the central bank's second interest rate cut in as many months.

The opposition also failed to remove the third stage of the tax plan from the bill, which flattens the tax bracket in 2024/25.

"That's all about politics, not about good sound economic policy," Mr Albanese told the lower house.

But Treasurer Josh Frydenberg said it would give Australians confidence their future pay rises were protected from bracket creep.

"This bill lowers taxes for hard working Australians, it puts more money in their pockets."

Centre Alliance MP Rebekha Sharkie supported the bill on her understanding the minor party would reach an outcome with the government on ways to bring down gas prices.

But Ms Sharkie noted her two Senate colleagues were still continuing negotiations with the government.

Labor will now try to convince Senate crossbenchers to support the amendment on Thursday, but the government appears to be moving closer to a deal to get the whole package passed before parliament rises.

The coalition needs the support of four out of six crossbenchers to succeed.

The two Centre Alliance senators are likely to back it, with leader Rex Patrick saying they were working through the final details of a deal to make sure the extra money in taxpayers' pockets doesn't get gobbled up by higher power bills.

Former Liberal Cory Bernardi also backs the tax relief package, leaving the government just one vote short.

This means returning Tasmanian senator Jacqui Lambie is likely to be the deal maker or breaker, but she's yet to declare her hand.

She is working with Centre Alliance in a very loose alignment, with the three senators meeting several times over the last 24 hours since arriving in Canberra.

Senator Patrick said part of the deal was that he and colleague Stirling Griff don't talk about Senator Lambie's position.

Senator Lambie told reporters she hadn't come to a position yet, saying her staff only started work on Monday and she hadn't had enough information from the government.

Senator Griff argues there's no use entertaining Labor's position, given the government has refused to budge on its three-stage plan, describing it as an all-or-nothing proposition.

Some opposition MPs have urged the party to back the full tax relief package.

The Greens implored Labor and the crossbench to stand firm if the Senate was forced to vote on the entire package.

"We don't need to be giving tax cuts to millionaires, to CEOs, to politicians; we need to be funding essential services," leader Richard Di Natale told reporters.

The first stage of the plan will deliver up to $1080 to low and middle-income earners when they lodge their tax returns in coming months.

The second stage will top up a low-income tax offset, which means more people earning up to $45,000 instead of $41,000 will get a 19 per cent tax rate.

The final stage flattens the tax rate from 32.5 per cent to 30 per cent for people earning between $45,000 and $200,000 from mid-2024.