With 30 June fast approaching this is a reminder of the superannuation and tax planning strategies that you may wish to consider and implement before 30 June.
Eligible low-income earners ($36,813 or less) who make an after-tax contribution into their superannuation account of up to $1,000 may qualify for a government paid co-contribution of up to $500. Please contact our office for eligibility.
Where a member of a couple earns less than $37,000, their partner can make an after-tax superannuation contribution of $3,000 on their behalf and receive a tax offset of up to $540. Please contact our office for eligibility.
Maximising your concessional superannuation contributions and claim a tax deduction.
Effective 1 July 2017, the 10% maximum earnings condition was removed for the 2017-18 and future financial years. This means that most people under 75 years old can claim a tax deduction for personal super contributions (including those aged 65 to 74 who meet the work test).
The concessional cap is currently $25,000 for all individuals, please keep in mind this includes your SGC/employer contributions; you can therefore make up the difference and claim a tax deduction on the balance up to the cap.
Non- Concessional superannuation contributions
The non-concessional contributions cap is $100,000 p.a. or a bring forward $300,00, over a three-year period.
If your total superannuation balance is equal to or greater than $1.6million you will no longer be eligible to make non-concessional contributions.
Pre-payment of deductible expenses
Pre-payment of up to 12 months of premiums on an income protection policy held outside super or interest expense on an investment loan can bring forward that deduction into this financial year. For individuals making pre-payment for the first year they may have the added bonus of being able to claim up to two years’ worth of deductions in the one tax year.
Small Business – “Base Rate Company” Eligibility
From the 2017-18 income year, a Base Rate Entity is eligible for the lower 27.5% company tax rate.
However, you still need to be a small business to be eligible for other small business tax concessions.
A base rate entity is a company that has a turnover less than the turnover threshold – which is now $25 million (increased from $10 million) for the 2017-18 income year. Please contact our office for further criteria.
Small Business – Immediate Write-off
The $20,000 instant asset write-off has been extended until 30 June 2018 (and 2019 subject to senate approval). This deduction is used for each asset that costs less than $20,000, whether new or second hand. You claim the deduction through your tax return, in the year the asset was first used or installed ready for use.
If you are a small business, you can immediately deduct the business portion of most assets that cost less than $20,000 each if they were purchased and your annual turnover is less than $10million.
Capital gains and losses.
A capital gain arising from the sale of an investment property or shares and capital losses can be used to offset the capital gain. Specialist advice should be sought before making changes to your investments. Please contact our office for further information.
Remember the 30th of June falls on a Saturday.
Please keep in mind that the 30th of June is on a Saturday this year. Therefore, please make sure any contributions you want to make this financial year are received by your fund before the 29th of June. With electronic transfer (including BPay) the contribution takes effect the day your superfund receives the money, not the day you make the transfer.