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.
Say Hi on Social
Receive More Money Tips and Market Updates directly to your Inbox
13 Financial Mistakes We All Make
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
AMP Takeover UpdateAMP Takeover Update Back in November 2020, AMP a takeover offer from the American company ARES to buy the whole AMP business. In November 2020, I created a video and a post with a purpose to warn everyone who owns shares in AMP, who has...
Catch-up Concessional Super Contributions Catch-up Concessional Super Contributions Often, when we reach the age of 50 or 60 we start to worry about our retirement. Do I have enough for my retirement? Is it too late to save sufficient balance to have safe retirement?...
How to choose super fundHow to choose super fund Let's be honest, what we all really want from our superannuation/pension fund is: lowest charges, best returns with minimum risk, super fund that looks after your interest as members, and provides you with a free...