We can’t believe it is that time of year again! We know that many of you have seen our checklist below before, however clients have told us that it is a very useful summary to ensure they are ready. We have updated the information for this year, so please use as your Action Plan. Don’t leave everything until the last minute as you do not want to miss out on any opportunities or tax savings that may be available to you.
End Of Financial Year Superannuation Strategies
Below is a list of super contribution types and the allowable contributions or regulations associated with each. There are many tax advantages associated with these contributions and several contribution types may be applicable for you:
1. Salary Sacrifice – sacrifice part of your salary and have it put into superannuation pre-tax. This could reduce your tax liability by up to 31.5% (from 46.5% to 15%). You also have the option of drawing down on your super as a pre-retirement pension if you are over age 55 – please refer to Spring Newsletter 2008 for further information or ask your adviser.
2. Deductible Contribution –
Contributions made by self employed or employers where a deduction can be claimed. Only mandated employer contributions can be made from age 75.
3. Undeducted Contributions –$150,000 p.a. or $450,000 over 3 years up to age 65. Contributions made where no deduction is claimed.
4. Co-Contribution – If your income is less than $31,920 you can contribute up to $1,000 and get a maximum of $1,000 contribution from the government. Sliding scale of government co-contributions to income of $61,919. See Co-Contributions Ready Reckoner below:
5. Spouse Contributions – contribute $3,000 to your spouse’s super and receive up to 18% rebate if spouse income is less than $10,800. Sliding scale for rebate to maximum income of $13,800.
6. Super Splitting – Superannuation contributions splitting means that you can split certain superannuation contributions made during a financial year to your spouse’s superannuation account. It is a way for your spouse to accumulate their own superannuation, even if they have a low income or they are not working. You need to notify your fund after 30 June to transfer contributions made during the 2011 tax year.
7. Super Portability – Gives you the opportunity to move some or all of your accumulated super into a different fund of your choice. It allows you to consolidate your superannuation benefits in one account or diversify your superannuation portfolio.
8. Superannuation Guarantee Contributions – 9% compulsory super contributions for staff and/or eligible contractors need to be paid within 28 days after the financial quarter.
Other End Of Financial Year Tax Effective Strategies
- Income Protection Plan – if you don’t have it, get it. Prepay for 12 months as it is tax deductible.
- Prepay loans, leases and deductible expenses up to 12 months in advance.
- Defer sale of investment assets until after 1 July to carry forward capital gains tax to the next year, or offset gains made this year by realizing losses before 30 June.
- Gearing to invest – borrowing to invest can enhance your portfolio growth and provide tax benefits.
- Make sure you claim all your eligible deductions for example charitable donations.
- Work related expenses – discuss with your accountant what expenses you are eligible to claim. For example, ensure you are using the most appropriate method to calculate your claimable car expenses.
There are many issues to be considered. Please seek advice prior to undertaking any of the above mentioned strategies. To find out more about how the above strategies may be of benefit to you, please contact our office as soon as possible.