Everything You Need to Know About Tax, According to an Expert

Lauren Powell
by Lauren Powell

Courtesy of An Organised Life

As tax time looms, Catherine Robson, the founder and CEO of award-winning financial planning practice Affinity Private, shares her expertise and explains everything we need to know for the upcoming tax season in layman's terms—you can thank us later.

The end of financial year is looming, and while it might be overshadowed by the federal election, which will follow two days later, it’s important not to lose track of this opportunity for financial reflection and proactive planning.

When it comes to paying tax, many of us behave like monkeys—it’s just how our brains are wired. The phenomenon is known as loss aversion and in monkey’s it manifests itself like this: Give a monkey one apple and he is happy, give him two apples and he is also happy. But give a monkey two apples and then take one away and the monkey goes ballistic. This is because both monkeys and humans are twice as sensitive to loss as they are to gain.

This is what happens when you pay tax—your brain has assessed your income based on what you have received over the course of the year, and when the tax office comes to take some away, it’s a painful experience. That’s why even though it does not make economically rational sense, some of us would prefer to have our employer collect and remit tax on our behalf rather than need to do this ourselves.

So what are some of the things you can do so that you don’t find yourself behaving like a monkey at tax time?

Have you completed your tax for the financial year?

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