Tax Refund time !

The 2013/14 financial year has started - and now taxpayers are facing the task of preparing their tax returns for the year that has just ended.   The commercial world will be holding it's breath - waiting to see what will be the fate of all those refund cheques which will flow out of the tax office.

The retail industry has been barely hanging on to life, under pressure from Internet traders and a public reluctant to spend money.  In past years, tax refunds have been the source of spending sprees - but this year may not follow that trend.

Firstly, there is the uncertainty of this being an election year.   What happens in Australia may depend on which side of politics gains the treasury benches - and the actual date we will go to the polls has yet to be decided.

The entire world financial situation is far from clear.  The European Union is wracked with debt and massive unemployment.  China seems to be winding back to a more modest growth rate and the world's biggest economy - the United States - has descended into a political standoff.    There are few indicators that better times are about to happen.

There is even a doubt that many tax returns will result in a refund cheque.   A year ago the Australian government moved the eligibility parameters on health insurance and many contributors continued to claim a rebate for which they were not entitled.   As a result, some families may receive a $ 1,700 tax bill instead of a refund cheque.

In uncertain times, prudent people reduce debt and where refund cheques are involved - this may be the year that they clear the amount owing on credit cards - and many will use a lump sum refund to reduce their home mortgage.   Those able to make a one-off $ 2,000 payment on a $ 300,000 mortgage will not only save $ 7,000 in interest, but also shorten the mortgage term - and that is a very attractive proposition.

Most decisions will be made when that refund cheque arrives in the mail box. If it's arrival coincides with doom and gloom from the news commentators it is likely to be either squirrelled away or used to reduce debt, but if we are assured that dark financial clouds have rolled away and the future looks certain - then the retail industry may get the bonanza they are hoping for.

Tax refund time will be either " make or break " for many in the business world this year !