There was a lot of talk about superannuation in the lead up to the election, but, thankfully there will be no changes to the rules regarding superannuation. This is great news because there are some great opportunities to reduce your tax burden and boost your super balances!
Tax deductible member contributions for everyone.
Everyone can claim a tax deduction for Super
The concessional contribution limit is $25k for everyone. All employees, contractors, business owners, can make a member contribution to their super fund and claim it as a tax deduction. If you have some spare cash, and you contribute to your super fund before 30 June, you can reduce your taxable income.
Unused concessional contributions can be carried forward for 5 years.
Lets say you earn $100k and your employer pays $9,500 into your super fund every year. You have not used $15,500 of your annual $25k limit. You can save up these unused contributions for 5 years and make a contribution of $77,500 in a single year. Why would you do this? You would do this in a year when you sold an investment and made a large capital gain, saving a lot of tax, and boosting your super! (Conditions apply)
Let the Government Contribute
The government Co-contribution is payable to members who make a non-concessional contribution, and have annual income less than $52k. The maximum co-contribution is $500 (on a $1,000 contribution for a member with annual income less than $37k) and is paid directly into the member's super account.
Don't forget the spouse!
The spouse offset is another benefit available when a spouse has assessable income less than $40k. The high income spouse contributes up to $3,000 into the low income spouses super fund, and the high income spouse receives a tax offset of up to $540 (an 18% ROI).
What do you mean "Concessional Contribution"?
Concessional contributions are employer contributions and member contributions for which a tax deduction is claimed (Max $25k per annum). Non-concessional contributions are member contributions for which no tax deduction is claimed (Max $100k per year, $300k over 3 years)