Superannuation planning 2014/15
Tax deductable contributions
The end of the financial year always seems to creep up faster than it should. Understanding what you could do before and after 30 June 2015 can provide the icing on the cake for employees, investors and those in small business. Such things as bringing forward tax deductions or delaying the receipt of income within the rules can mean less tax this year. When it comes to superannuation, make sure you maximise the tax deduction this year or salary sacrifice the right amount so you get the best possible outcome and don’t end up with tax penalties.
For anyone who was aged 49 or over as at 30 June 2014 and was eligible to make tax deductible contributions to superannuation, the maximum amount is $35,000. Note this includes Superannuation Guarantee contributions. For those under t49 the limit is $25,000
Some people, like employees, are unable to claim deductions for personal contributions. They can, however, benefit from salary sacrificing to achieve the same maximum contribution. To be effective, though, the salary sacrificing agreement with your employer has to be in place in sufficient time before year end to enable the desired amount to be contributed in time.
If you are over 65 you will need to meet a work test to contribute to super. You will need to work for at least 40 hours during 30 consecutive days prior to making personal contributions. Superannuation Guarantee can be paid on your behalf though.
To claim a deduction for personal superannuation contributions you must receive less that 10% of your income, fringe benefits and other related payments from employment.
After tax contributions
You can make after tax contributions to super which could come from your personal savings, or othr cash you may have freed up. This financial year the maximum personal after tax contribution is $180,000, however, if you are under 65 you can contribute up to $540,000 over a three year period.
The way it works is that if you are under 65 and make total after tax contributions of more than $180,000 in a financial year the bring forward rule is triggered, allowing you to make non-deductible contributions of up to $540,000 in total over a fixed three year period
You should be aware though that exceeding the after tax contributions may result in penalty tax payable so get good advice before finalising your contribution.