4 Reasons to Make Personal Tax-deductible Super Contributions
4 Reasons to Make Personal Tax-deductible super contributions
Since 1st July 2017 you have ability to contribute to super personally and still claim tax deduction for your contribution, which effectively provides you with the same outcome and benefit as salary sacrifice arrangement through your employer.
This is great news that provides more flexibility as to how and when to contribute to super, as before 1st July 2017 the tax deduction was only available to self-employed.
But now it is available to most people and can be a great way to improve your superannuation and retirement savings, while assisting with managing your tax bill for the financial year.
You are eligible if you are:
- Below 75
- Meet the work test if you are of age between 65-74
- No test if you are below age of 65
You can make those contributions any time of the year and claim your tax deduction when doing your tax return.
You have to advice your super fund before the end of the financial year that you wish to claim tax deduction for specified contributions.
There is a limit of $25,000 a year. so don’t go over that limit.
There are specific exceptions, but I will explain them in another article.
If you claim tax-deduction for your contributions, then you cannot claim government super co-contribution for those contributions.
4 reasons to make this type of contribution to benefit the most:
1. If you are on high MTR and you cannot have salary sacrifice arrangement
2. If you are self-employed – you have no employer and no SGC (Super Guarantee Contributions)
3. If you sold an asset and you are to pay a CGT (Capital Gains Tax)
4. If your employer does not provide salary sacrifice arrangement, but you want to top up your super savings.
If you really want to understand all tax savings by using super contributions, watch my video about salary sacrifice as the tax savings are exactly the same.
A tiny request: if you liked this article, please share it
Most people don’t share articles, thinking that one share will not make a difference, but believe when I say, each article takes hours of putting it together, and I create them as I really want to make a difference in people’s lives.
So thank you so much for your support. Not only you will seriously help this blog to grow, but more importantly you will help people who might need this information and advice.
Some great suggestions how you can share it:
- Pin it!
- Share it on Facebook
- Tweet it
- Email to your friends and colleagues
It won’t take any more than 10 sec, as I’ve created all share buttons here for your convenience
Just pick your favourite button from the left side of this post, write your note and it’s done. THANK YOU
Ethical Investing Ethical Investing When you enter my website AboutRetirement.com.au, you will immediately find lots of financial information about retirement. You just cannot miss that I love working with people who are serious about taking the time to be well...
Age Pension and Travel Overseas Age Pension and Travel Overseas Now that Covid is no longer such a thread, international borders have opened, all airlines are just waiting for you to jump on the plane and cruises boats are awaiting new passengers, many retirees start...
Age Pension Work BonusAge Pension Work Bonus Age Pension rules are complicated, and Work Bonus is no different. It can be very beneficial for some pensioners and not apply to others, so hopefully today I will be able to simplify this Age Pension benefit for you. I...