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Tax Return Checklist & 9 super tips for this EOFY

1. MAKE EXTRA SUPER CONTRIBUTIONS AND CLAIM A TAX DEDUCTION.

If you contribute to your super out of your after-tax income or savings, you may be able to claim these contributions as tax deductions. Personal (concessional) contributions count towards the concessional contributions cap of $25,000.  

It’s important to understand that extra super contributions are voluntary contributions you make that are above the compulsory 9.5% super guarantee (SG) that your employer is legally required to pay you. You can’t claim those employer super payments as tax deductions, but super guarantee contributions are included in your concessional contributions cap.

2. MAKE ‘CATCH-UP’ SUPER CONTRIBUTIONS

If you didn’t use the whole $25,000 cap in 2018/19, you may be eligible to carry forward your concessional cap and make ‘catch up’ contributions.

From  1 July 2018, if you have a total superannuation balance of less than $500,000 on the 30 June of the previous year, you may be entitled to contribute more than the concessional contributions cap and make additional contributions for any unused amount.

3. MAKE THE MOST OF NON-CONCESSIONAL CONTRIBUTION RULES.

If you are under 65, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps. This is known as the bring forward arrangement. Click here for more information on the conditions that apply.

4. GET A SUPER TOP-UP FROM THE GOVERNMENT.

If your taxable income is going to be less than $53,564 this financial year and you make an after-tax contribution to your super, the government will match your contribution up to a maximum of $500. 

You don’t need to apply for this co-contribution. If you’re eligible, the government will automatically top up your account after you have lodged your tax return.

To be eligible for the government co-contribution at least 10% of your income must be from your job or a business. 

5. BOOST YOUR SPOUSE’S SUPER AND REDUCE YOUR TAX.

If you have a spouse who will earn less than $40,000 this financial year and you make a super contribution on their behalf, you may be able to claim a tax offset of up to $540 on your tax return. 

A tax offset (also called a tax rebate) reduces the amount of tax you need to pay.

6. TAKE ADVANTAGE OF THE FIRST HOME SUPER SAVER (FHSS) SCHEME.

If you’re saving to buy your first home, you can make a pre-tax contribution of up to $15,000 to your super in any financial year (up to a maximum of $30,000 in total) to help you save for a deposit. You can then withdraw those funds for your home deposit. This is known as the First Home Super Saver Scheme.

There are two benefits of making extra contributions to your super to save for a first home deposit:

  1.  You’ll pay less tax.  Super funds in Australia pay a concessional rate of tax of just 15%, which is lower  than even the lowest marginal tax rate.

  2. You can claim any extra super contributions that you make as a tax deduction (up to the concessional contributions cap of $25,000).

7. CONTRIBUTE THE PROCEEDS FROM THE SALE OF YOUR HOME TO SUPER.

From 1 July 2018, if you are 65 years old or older and meet the eligibility requirements, you may be able to choose to make a downsizer contribution into your superannuation of up to $300,000 from the proceeds of selling your home.

Your downsizer contribution is not a non-concessional contribution and will not count towards your contributions caps. The downsizer contribution can still be made even if you have a total super balance greater than $1.6 million.

8. CHECK YOUR INSURANCE COVER.

Before 1 April this year, many super funds provided an automatic level of death, total and permanent disablement, and income protection insurance cover for their members.

However, the rules have changed. You now have to opt-in for this insurance cover if you have inactive super accounts or super accounts with low balances. You should, therefore, review the amount of cover you have to see if it’s appropriate for your needs.

9. CONSIDER SETTING UP A SALARY SACRIFICE ARRANGEMENT WITH YOUR EMPLOYER.

Salary sacrificing into super involves your employer deducting an agreed amount of your pre-tax salary or wage and putting it into your super instead of paying it into your bank account. This can save you tax because you’ll only pay 15% tax on the salary sacrificed contribution, rather than your higher marginal rate of tax.

Salary sacrificing up to your annual concessional contributions cap of $25,000 can be a good strategy to build your long-term wealth and minimise your tax, provided you can afford to do it.

HOW WE CAN HELP

Contact us on (03) 9562 0742 if you have any queries about superannuation. We’ll take the time to understand your specific situation and needs before providing you with the right advice.

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