This is a busy time for most people and businesses and the importance of having your end of year activity planned cannot be overlooked. We have provided some tips for you below to maximise both your time and returns for your Superannuation and Tax.
This remains one of the best ways to maximise your returns and minimise tax. The differential between the marginal tax rate and the super fund tax rate of 15% is hard to pass up, particularly for high income earners. Some of the key issues to address between now and June 30 are;
- Review the level of concessional (paid by employers, salary sacrifice or any extra employer contributions) and non concessional (after tax income payments, spouse contributions, any amounts over and above the cap amount) contributions made so far and assess if you need to top up. More importantly, make sure that you are not over your maximum level. This responsibility is yours and not that of your employer(s).
- The current levels allow for a maximum of $25,000 for those under 50 and $50,000 for those over 50 to be contributed as concessional contributions.
- The current levels allow for a maximum of $150,000 to be contributed as non-concessional contributions in a given financial year or up to $450,000 maximum in a three year rolling period if you are under 65.
- For some people you may qualify for the $1000 government co contribution. This is an excellent initiative where the government will match your contribution, up to a maximum of $1,000, subject to your income level. People earning less than $31,920, inclusive of super and fringe benefits, are entitled to the maximum $1,000. For those that earn between $31,920 – $61,939 you will be eligible for a proportionally lower co-contribution.
- Ensure that you have accurately recorded and are aware of the levels of salary sacrificed contributions to your super fund(s). Contributions above the maximum salary sacrifice amounts will incur tax penalties.
- If you have a SMSF, assess if you can run your life insurance premiums through it. These are a tax deductible cost to the fund.
- Use the review to ensure that you are receiving the correct amounts, and that if you have staff, that you are recording and paying the right amounts.
General Tax Tips for Pre June 30 Planning:
- Consider the timing and declaration of director’s fees.
- Undertake payments of necessary consumable items pre June 30.
- Consider the timing and declaration of dividends.
- If you are a business owner ensure that your Superannuation Guarantee Charge (SGC) payments for employees are made before June 30.
- If you have investment properties, and if the opportunity is there, order your tax depreciation schedule.
- Revisit the current structures to ensure that they are still relevant for your investments.
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