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FINANCE | Why boost your super?

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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 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 might be eligible to claim a tax deduction.
How much can I contribute?
For the 2017-18 financial year 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 percent 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 might 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 June 30.
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 might send you the appropriate form to complete or you can use form NAT 71121 available online at to provide written notification to your fund. Your super fund must acknowledge receipt of this notice to make it a valid claim.
What if I’m approaching the cap?
If you have maxed out your cap for this year and your spouse’s income is under $40,000, you might pick up a tax offset of up to $540 by making a spouse contribution to their fund.
Need help?
Your financial adviser 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, talk to your adviser about putting in place a plan to ensure you take advantage of next year’s concessional contribution opportunity.

The entire May 16, 2018 edition of The Weekly Advertiser is available online. READ IT HERE!

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Posted on May 16 2018

Posted by on May 16 2018. Filed under Finance. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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