Contributing to Super and Claiming a Tax Deduction

With all the new contribution cap rules that have been introduced, it’s quite easy to forget that there is one way the Government has made it easier for you to save tax and put money into super. Well, it sure is super considering what you could do with your tax savings!

Here’s the good news! Since July 2017, if you are under 75 years of age you too are eligible to contribute money from your bank account into super and claim a tax deduction. Provided, of course, that certain conditions are met.

This is particularly useful for anyone who is on a higher marginal tax rate, or doesn’t have the opportunity to set up a salary sacrifice arrangement. If you earn above $37,000 a year, this is where the marginal tax rate plus Medicare Levy rises to 34.5%. Claiming a tax deduction on super contributions effectively reduces your tax to 15%. That’s a big saving!

A few things to remember though:

  • There is still a $25,000 concessional contribution cap, which includes any guaranteed contributions from your employer or any salary sacrificing that you do
  • Personal contributions are only tax deductible if you ask your super fund to treat them that way so, them means there is some paperwork that needs to be done. We’ll help you with this.
  • Anyone over 65 must meet the “work test” to be eligible to claim a tax deduction. This involves working 40 hours in any 30 day period in the financial year in which you plan to contribute and, you must be paid for this work.
  • Claiming a tax deduction for your personal contributions means that there could be tax payable on the way out of super.

Please check before making any super contributions so that you don’t exceed your super cap of $25,000. Timing is also crucial as your contribution must be received by your Fund before 30 June 2018 to be eligible to claim a tax deduction.

Imagine what you could do with the tax that you save!

  • Reduce your home loan
  • Top up your super next time round
  • Have a holiday
  • Deposit for an investment property
  • Upgrade your car
  • Pay for your children’s education

For more ways to minimise your tax, download our guide – Minimise Your Personal Tax – Tax Planning Guide

Call us today to see how we can help you save some tax and plan what you will do with it!