In the lead-up to 30 June 2018, we want you to be aware of new opportunities to save tax with super contributions.

CONTRIBUTING TO SUPER AND CLAIMING A TAX DEDUCTION

With all the new contribution cap rules, it’s easy to forget that there is one way the Government has made it easier to save tax and get money into super.

Before July 2017, only people who were self-employed could contribute money to super and get a tax deduction.

The only way for employed people to do this was to salary sacrifice and get their employer to divert part of their pay to their super before it had been taxed. The problem with this is that you may decide after the fact that you would like to contribute to super, but the opportunity to salary sacrifice is long gone.

Here’s the very good news! Since 1 July 2017, people under the age of 75 are now eligible to contribute money from their bank account to their super and claim a tax deduction for it (if certain conditions are met).

This is especially useful for people who are on higher marginal tax rates or their employer refuses to set up a salary sacrifice arrangement.

The people who would benefit the most are those who earn above $37,000 per year, as this is where the marginal tax rate plus Medicare Levy rises to 34.5%. Claiming a tax deduction on super contributions effectively makes your tax 15%. That’s a big tax saving!

Things to remember

  • There is still a $25,000 concessional contribution cap, which includes any guaranteed contributions your employer puts in and any salary sacrificing you do.
  • Personal contributions are only tax deductible if you ask your super fund to treat them that way. Therefore, there is paperwork to be done. We can help you with this.
  • Anyone over 65 must meet certain conditions to contribute to super, namely the ‘work test’. The ‘work test’ involves working 40 hours in any 30-day period in the financial year in which you plan to contribute. You must be paid for that work.
  • Claiming a tax deduction for your personal contributions means there may be tax payable on the way out of your super.

If you get unexpected bonuses, have a high marginal tax rate, or don’t like to or can’t salary sacrifice – this strategy may be something to consider!

IMPORTANT

Please contact us ASAP for assistance with making your super contributions. There are a few things we need to check for you to ensure you don’t exceed your super caps, plus the timing of your contributions is crucial to get right to entitle you to a tax deduction for them in the 2018 year.

Contact us today! to book your personal Tax Planning Session. This session will be tailored to your individual needs and requirements. The sooner we get started, the sooner we can help you save tax. You need to act now, to allow sufficient time to implement your tax saving strategies before the 30th June 2018.

Imagine what you could do with your tax saved!

    • Reduce your home loan.
    • Top up your Super
    • Have a holiday
    • Deposit for an Investment Property
    • Pay for your children’s education
    • Upgrade your Car

At this point, we want to recommend you to read this decent article about VA home loans and how to reduce taxes in the home buying process. Consider Brooklyn area options for hard money, which will help you to handle residential and commercial projects of all sorts and budgets.

Don’t miss out!

NOW is the time to discuss with us the actions you can take before 30th June to reduce your tax and grow your wealth!

Tony Muller
Chief Technology Officer
Tony has business management and information technology experience gained in the public and private sectors. He has worked with the Queensland Government Chief Procurement Office on IT tenders, and is also an Australian Institute of Management graduate.

Tony is passionate about how technology can facilitate business operations, and is always looking for innovative solutions to business requirements.