AN IPSWICH businessman has a snappy idea for cashed-up workers to spend their tax return - on their funeral.

Simplicity Ipswich funeral director Paul Whear is urging tax payers to use their rebate to pre-plan their own funeral.

The average Australian tax refund is $2,112 and 29% of Australian use their new found cash to pay off bills.

Just over 10% use their tax return to pay off debt.

Mr Whear said he encouraged the community to put their hard-earned cash towards planning for their funeral.

"Making end of life decisions is never easy, and planning a funeral is no exception," he said.

"The reality is there are over 80 decisions to be made when planning a funeral, all in the space of 72 hours, not to mention the added pressure of finding thousands of dollars in a hurry.

"A prepaid funeral plan offers an attractive mix of benefits for local residents wanting to fund their own, or a dependant's funeral costs, and your tax refund is a great way to start paying for this expense."

The average cost of a funeral is about $6,000, which industry insiders expect to increase to more than $13,200 in the next two decades.

A prepaid funeral allows people to plan a funeral now, and pay at today's rate, Mr Whear said.

He said there were some things to keep in mind during tax time.

Obtaining a deceased family members TFN

"If you do not have access to the tax file number of the deceased, you will need to notify the ATO that you are the authorised person. To do this, you will need to complete a 'notification of a deceased person' form which can be found on the ATO website."

Date of death tax return

"If you have lost a loved one this year and are the executor, you will need to complete a date of death tax return on behalf of the deceased person.

"This tax return covers the period from the 1 July 2017 up to their date of death.

"If a date of death tax return is required, you will need to complete a tax return and lodge it as usual. You may also need to complete a supplementary section for further details.

"In some cases, a date of death tax return is not required.

"To determine what forms you will need to complete, visit the ATO website for more information."

Deceased estates

"If you are a beneficiary of a deceased estate, there may be things to consider when completing your personal tax return.

"Some tax obligations may include: super benefits, earning income and receiving assets. To determine how this will affect you, contact the ATO or an accountant."