Did you know Superannuation is also a tax strategy?
In the lead up to 30 June, you have the opportunity to maximise your superannuation contributions for the financial year; in turn maximising deductions to be claimed and minimising income tax payable.
The maximum amount of superannuation that you can contribute for the 2022 financial year is $27,500 per person, including any superannuation guarantee charge (SGC) from employers, salary sacrificed superannuation paid or personal deductible contributions made.
This contribution must be paid and cleared from the employing entity and be received by your Superannuation Fund before 30 June each year.
If you require assistance in calculating the available superannuation to enable you to maximise your deductions without exceeding the contribution threshold, please contact your Fornaro Accountants Accountant directly.
Superannuation & Tax Considerations
- Personal tax deductible contributions form part of your concessional contributions. They are combined with other concessional contributions such as contributions made by an employer, and count towards your concessional contribution cap.
- Concessional contributions are taxed within your super fund at a rate of 15%.
- If you are a high income earner (over $250,000 combined income and superannuation contributions in the 2022 financial year) you may have to pay ‘Division 293 Tax’. This is an additional tax of 15% calculated on your concessional contributions and is payable by you personally.
- If you are a low income earner (Under $41,112 in the 2022 financial year), you can make a $1,000 non-concessional contribution and the government will match up to $500 once your income tax return has been lodged and assessed by the Australian Taxation Office.
- Concessional contributions that exceed your concessional contribution cap may result in additional tax being payable. You may also be required to withdraw your excess contributions and the associated earnings, from super.
- The amount of tax deduction you claim cannot reduce your assessable income below $0. You cannot carry forward a tax loss that arises from superannuation contributions.
- Personal contributions made to a super fund are preserved and cannot be accessed until such time as a condition of release has been met.
- Your eligibility to claim a tax deduction for personal super contributions will depend on your overall tax position. You should discuss the taxation consequences of making a personal deductible contribution with your Fornaro Accountants Accountant.
- If claiming a tax deduction for personal concessional contributions, you will need to provide your superannuation fund with a valid ‘Notice of Intention to Claim a Tax Deduction’. This can normally be obtained from the relevant retail superannuation fund’s website. This notice must be provided to, and acknowledged by your super fund before the earlier of the date:
- you lodge your income tax for the financial year in which the deduction is being claimed,
- you withdraw your super benefits,
- you split your contributions with your spouse,
- you roll your benefit over to another super fund, or
- you commence a pension with all or a part of the contribution.
Superannuation can be an effective tax strategy and is an important component of annual tax planning. Be sure to touch base with your Fornaro Accountants Accountant to discuss your personal situation further.
*This article is for information purposes only and provided by Fornaro Accountants. It is not to be considered personal advice.