Why boost your su­per?

The Weekly Advertiser Horsham - - News -

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 www.ato.gov.au 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.

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