Boost Your Super Before 30 June

The end of the financial year is rapidly approaching and, along with it, the opportunity to claim a tax deduction on additional superannuation contributions.

Why contribute more to super?

Superannuation does impose restrictions on access to your money. It is, after all, intended to provide for your retirement. So why would you lock up more of your money? Because superannuation remains one of the most tax-favoured environments within which to build wealth. That can make it an ideal place to invest your long-term savings.

What are concessional contributions?

Concessional contributions are super contributions that have been claimed as a tax deduction by someone. They include employer contributions – both super guarantee and salary sacrifice – as well as personal contributions on which you may be eligible to claim a tax deduction.

How much can I contribute?

For the 2019/20 and 2020/21 financial years, the limit on concessional contributions from all sources is $25,000. For example, if your annual salary is $150,000 and you only receive super guarantee contributions, your employer will contribute $14,250 (9.5% of your salary) to your fund. That means you can make personal contributions of up to $10,750, and if you meet the eligibility terms, claim a tax deduction.

Entering into a salary sacrifice arrangement with your employer would achieve the same result. Based on the above salary, the maximum amount you could salary sacrifice is also $10,750, but you may not have enough time to do that this financial year.

When is the deadline and what paperwork is required?

Your contributions must be received and credited by your super fund by 30 June. To play it safe make your personal contribution at least two weeks before the end of financial year.

You must also notify your superannuation fund that you intend to claim a tax deduction for a personal contribution. Your fund may send you the appropriate form to complete or you can use form NAT 71121 available from www.ato.gov.au (link below) to provide written notification to your fund. Your super fund must acknowledge receipt of this notice to make it a valid claim.

https://www.ato.gov.au/Forms/Notice-of-intent-to-claim-or-vary-a-deduction-for-personal-super-contributions/

What if I’m approaching the cap?

If you’ve maxed out your cap for this year and your spouse’s income is under $40,000, you may pick up a tax offset of up to $540 by making a spouse contribution to their fund.

Need help?

We can help you work out how to make the most of your concessional contribution cap and explain the finer details. And if you miss this year’s deadline, We can help you put in place a plan to ensure you take advantage of next year’s concessional contribution opportunity.

The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information on this article you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.

Braeside Wealth and its advisers are Authorised Representatives of Fortnum Private Wealth LTD  ABN 54 139 889 535 AFSL 357306

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