Year End Tax Strategy – Self Employed can claim a Deduction for Contributions to Super (generally)

During the tax year, if you earn less than 10% of your income from wage/salary, and the rest from self employment, you can claim a tax deduction for contributions to super. For example you may have extra cash profit in the business bank account, and wish to obtain a business deduction to reduce the profit. If you make such a payment, there are two things to be aware of.

1              Complete a notice or send a letter, of intent to claim a deduction, and in return, you receive an acknowledgment from the fund. You lodge this notice before you lodge your tax return for the year the contribution was made, of the end of the tax year following the year of contribution.

2              Watch you keep under contribution caps $25,000 if under age 50 or $50,000 if over 50 between 1/7/2007 – 30/6/2012. After 30/6/2010 the over 50 cap drops to $25,000 under the current law. Remember the cap includes all contributions by you and any employer (even some part-time jobs).

If you are not eligible for a self-employed deduction, and have cash you want to contribute, consider a contribution on behalf of your spouse. You may get an offset of up to $540. The contribution needs to be over $3000, for a spouse with income and reportable fringe benefits of less than $10,800. The offset reduces on a sliding scale as spouse income increases, stopping once their income reaches $13,800, or reduces if contribution is under $3000.


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