2023 EOFY Checklist
Many people don’t think of their super at all during the year, but this is the time to start looking at how you can save tax and help grow your super balance.
Check your Super Guarantee Payments
The first thing to do is make sure you have actually been receiving your 10.5% Superannuation guarantee (SG) employer contributions by checking your super balance (which can be done through the MyGov website) and calling your employer if there is a problem. If you’ve been working in more than one job, especially casually, then make sure you check with them all. Employers do have until the 28th of July to get these into your super fund.
Maximise your contributions
If you can afford it, maximising your concessional super contributions may be beneficial.
The Concessional Contribution limit allows our super up to $27,500 (less your 10.5% SG). You will pay tax on contributions at 15% but this may be less than what you would pay taking it as income. Relatively new legislation allows some people to add much more than the $27,500 which could be provide a significant tax benefit for those people that are eligible.
Concessional contributions may be particularly useful if you have made a capital gain during the year and are looking for ways to offset the resulting tax bill. This is especially valuable where no contributions have been made previously. Some people may be able receive a tax deduction of $130,000 this year.
If you do make a personal concessional contribution make sure you work out how much your employer is contributing so you don’t go over the $27,500 cap.
Make a super contribution… and get up to $500 back!
Looking for a 50% guaranteed return? Then look no further than the government’s super co-contribution scheme.
It’s just a matter of getting in before June 30 this year and is paid after your 2023 tax return is lodged.
To get this you have to make a $1,000 non-concessional super contribution – that is, the contribution is paid from your after-tax income and doesn’t give you any tax deduction. (Lower amounts maybe contributed but will result in a lower co-contribution).
The maximum co-contribution is payable to those whose incomes are less than $42,016. It then reduces gradually until it phases out entirely when your income hits $57,016.
Spouse contribution
By making a super contribution using a spouse code into their super fund you could save tax.
Spouse super contributions can now be made for spouses earning up to $40,000 per year.
If your spouse has earnings below $37,000 you can claim the maximum tax offset of $540 when you contribute $3,000 to their super fund. This phases out at over $40,000.
Non-concessional contributions
These are after-tax contributions and can be a good way of building a super balance if you have come into a large amount of money such as an inheritance or sale of property. These contributions are capped at $110,000 or $330,000 every three years in one hit (age limits apply), and are limited to people with less than $1.6 million in their accounts.
First-time buyers’ and super
If you have not purchased a home previously you can use your super to achieve a boost for your deposit. You need to manage this carefully so get good advice.
SMSF
If you have an SMSF you may be able to achieve a personal tax deduction of $55,000 or more in one year (each). This is highly advantageous to anybody who has sold an investment property or assets during the year.