Super way to get tax saving

AMID all the noise about the federal election, it is easy to overlook that the end of the financial year is fast approaching – and that means it is time to consider giving your super a boost.

We are all facing rising living costs, so it can be harder to find extra cash to tip into super this year. But the upside is that you may be able to claim personal super contributions on tax. This can mean a super-sized tax refund. So there can be benefits today from growing your nest egg for tomorrow.

The thing is, time is running out for contributions to be made – and claimed – in the current financial year. It is a busy few weeks ahead for the nation’s super funds, and most request that you make a contribution by at least June 23 so that it can be recorded in your account by June 30.

With this in mind, let us take a look at how you can give your super a lift – and maybe receive a little extra in return.

Even though the boss may be making compulsory contributions to your super, you may be able to add a bit extra from your own pocket.

Better still, you could be entitled to claim the amount you chip in on tax.

Making a personal contribution to super is easy. You can usually BPAY a payment to your fund from your everyday bank account.

You will need to let the fund know you plan to claim the contribution as a tax deduction before claiming it in your 2021-22 tax return.

Your fund’s website will have the form you need to fill in to do this.

An annual limit of $27,500 applies to before-tax super contributions. This total includes employer contributions, salary sacrificed contributions, and your own voluntary contributions. Be sure not to exceed the limit or you may have to pay extra tax.

If you have a decent sum of cash to invest in super – maybe you have sold an investment property for instance, it is possible to make an after-tax contribution of up to $100,000 annually.

Or you can contribute as much as $330,000 by bringing forward three years’ worth of contributions.

You cannot claim a tax break for after-tax contributions. On the plus side, they are not taxed within your fund.

If you are a low to middleincome earner, adding to your super could see the government throw in some extra money. Under the co-contribution scheme. if you earn less than $41,112 annually, the government will contribute 50 cents for every $1 you add to super up to $500 each year.

This way, if you contribute say, $1000 from your own money, you could receive a co-contribution of $500. You can even be eligible for a partial co-contribution if you earn up to $56,112.

Have a chat with your accountant or financial adviser to know what you’re entitled to claim with super contributions. But don’t delay.

Remember, those contributions need to be with your fund well before June 30.