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What should I do with my superannuation before EOFY?

Here are some things you can do with your superannuation before tax time. Source: Getty

Aussies are fairly vigilant when it comes to claiming work expenses at tax time, but there’s an often-forgotten tax hack: your superannuation.

Here are a few things you can do with your super before 30 July:

Concessional contributions

Concessional contributions to your super are personal contributions you make on top of your employer’s mandatory 9.5 per cent contribution.

That contribution is taxed at 15 per cent - which is already around half of the amount you’re taxed by your employers - but ultimately it’s more money invested in your future.

On top of that, it’s an effective strategy to reduce your taxable income - which means increasing the refund you’re entitled to.

You’re only allowed to contribute $25,000 to your super, inclusive of the 9.5 per cent superannuation guarantee from your employer, so be sure to not exceed the cap.

To make a concessional contribution, you must receive your income from:

  • Salary and wages;

  • A personal business (eg freelancers or self-employed contractors);

  • Investments;

  • Government pensions or allowances;

  • Super; or

  • Partnership or trust distributions.

I’ve made a concessional superannuation contribution - now what?

You can claim a deduction for these personal super contributions, but you must have given your super fund a ‘notice of intent to claim or vary a deduction for personal super contributions’.

That notice can be given the day you lodge your tax return for the year in which you made those contributions, or at the end of the income year following the one in which you made the contributions.

You also need to receive an acknowledgement from your fund that they’ve received your notice.

When you complete your tax return, you can claim a deduction for the amount of the contribution stated in your notice.

Deductions for personal super contributions must be claimed at ‘personal superannuation contributions’ in the ‘individual tax return’ supplement, according to the Australian Taxation Office.

What does this do for me?

  • Claiming a deduction for your super contribution means you reduce your taxable income - which means you reduce the amount of tax you need to pay;

  • Personal super contributions you claim as a tax deduction are included in your fund’s income, which means they’re taxed at the rate of 15 per cent (unlike the 30 per cent rate your income is generally taxed at);

  • If you claim a deduction for a personal contribution, you could be eligible for a low income superannuation tax offset on the tax paid on the contribution - but the ATO will work this out for you when you lodge your tax return.

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