As the financial year is closing again there are several things to watch and action for self-managed super (SMSF) before 30 June, such as contributing more to super within the limits (below). Generally, super contributions made by the cut-off dates are tax deductible in the financial year you pay them.
Key SMSF Lodgement Dates unless you use a tax agent to lodge, returns are due 31 October, with other dates for payments and variations – watch the lodgement dates. See ATO.
Pension Phase – Ensure minimum pensions have been paid and withdrawn well before 30 June
Government Co-Contribution for Incomes less than $33,516, reducing up to $48,516. Eligible Australians who are earning less than $33,516 in the 2013/2014 financial year will receive 50 cents for every dollar (up to a maximum of $500) of after-tax money that they contribute to their super account. And people who earn over that amount have their Government co-contribution reduced by around three cents for every dollar over that amount, until it reaches zero at $48,516. The payment is made once you lodge your tax return. See ATO website.
Self-Employed Contributions – If you’re self-employed, you don’t have to make super contributions to a super fund for yourself – however, you may want to consider super as a way of saving for your retirement. You need to pay the minimum super guarantee rate of each employee’s ordinary time earnings at least once every quarter, by each cut-off date – 28 October, 28 January, 28 April and 28 July. You can choose to pay more often if it suits you – for example, on a monthly basis. Generally, super contributions made by the cut-off dates are tax deductible in the financial year you pay them. From ATO.
Concessional Contributions Caps – Are contributions made into your super fund before any tax is paid on them. They can include super guarantee, insurance premiums paid to a super fund for you, salary sacrificed amounts and also any amount allowed as a personal super deduction in your income tax return.
The concessional contributions cap for 2010, 2011 and 2012 is $25,000.00 for people less than 50 years old. For people aged 50 or more, the contributions cap for 2010, 2011 and 2012 is $50,000.00.
The concessional contributions cap for 2013/14 is $25,000.00 for everyone, regardless of age or super balance. Concessional contributions over the cap are taxed at 31.5% in addition to the 15% already taxed in the fund. See ATO
Non Concessional Contributions – Non-concessional contributions are generally the after-tax contributions you make to a super fund. They include personal contributions you make from your after-tax pay. They aren’t usually taxed in the super fund, but if you exceed your non-concessional contributions cap a tax of 46.5% (47% from 2014-15) applies to the excess. In 2013–14 the non-concessional contributions cap is $150,000. In 2014-15 the non-concessional contributions cap will increase to $180,000. Ensure the yearly cap $150,000 is not breached, (or $450,000 if the next two years are brought forward). Also check the previous three years for the brought forward rule, if you used it in the past. “Trustees and their advisers should take care to properly identify the start and end dates of any bring forward periods to ensure their contribution eligibility is correctly assessed and to avoid excess contribution penalties,” said Peter Burgess, National Technical Director, SPAA. See ATO for more. It can be advantageous to invest through your super instead of outside super. Money you invest into your super from your after-tax income doesn’t get taxed on the way in because you’ve already paid tax on this money. Instead, you pay a maximum of 15% tax on any earnings you make in your super account, rather than paying tax at your marginal tax rate as you would if it was sitting in a bank account, which could be up to 45%.
Spouse Contribution Top-Up – If your spouse’s assessible income is less than $13,800, then you can potentially make contributions on behalf of your spouse and claim a tax offset. The maximum tax offset available is $540, if your spouse receives $10,800 or less in income, provided you make an after-tax (non-concessional) contribution of at least $3,000. The tax offset is progressively reduced until it reaches zero for spouses who earn $13,800 or more in assessable income in a year. See ATO.
SMSF Supervisory Levy changes – Up to 1 July 2013, the SMSF supervisory levy is payable for the financial year to which the self-managed super fund annual return (SAR) relates. From 1 July 2013, the levy will be payable for the financial year in which the annual return is due – for example when you lodge your 2014-15 annual return, you will pay the levy for 2015-16 financial year. This is consistent with the rules for Australian Prudential Regulation Authority (APRA) regulated funds. In order to bring collections forward, transitional provisions apply to the levy for the 2013-14 financial year so that it is payable in two instalments and collected upon lodgment of the 2013 SAR and the 2014 SAR. The annual SMSF levy will also increase from $191 in 2012–13 to $259 from 2013–14. The levy will still be collected when the SAR is lodged. See full table.
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