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Bring forward your tax deductions

If you are looking to reduce your tax bill this financial year, it is a good idea to try to bring forward as many deductions as possible. By thinking about tax deductions that you are eligible to make, and spending the money in the current financial year, you can reduce your taxable income.

By reducing your taxable income, you will reduce your tax bill. Examples of things you may want to purchase in this financial year include business expenses, education expenses or work-related expenses.

Of course, this may mean that you are missing out on the deductions in the next financial year. However, there is the added advantage that you will have pre-paid many of your necessary expenses.

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Tax on super death benefits for dependants vs non-dependants

July 9, 2020

A super death benefit is the super paid after a person’s death, usually to a nominated beneficiary. These benefits are subject to different tax treatments, depending on whether the beneficiaries are dependant or non-dependant.

Superannuation death benefits will generally be received tax-free by tax dependants, who are considered to be:

Dependants will not have to pay tax on the tax-free component of their super in the event that they:

However, they will be taxed at their marginal rate if they receive a capped benefit income stream and:

Not all super death benefits are subject to tax; for non-dependants, there is a taxable portion. This component is largely made up of after-tax super contributions that the deceased member has made.

Super death benefit payments are subject to tax when:

Non-dependants must calculate how much money in the super account is a:

The amount of tax non-dependants pay will be based on their marginal tax rate, however, this amount may be reduced by tax offsets. For the taxed element of the taxable component, the effective tax rate is your marginal tax rate of 17% (whichever is lower). For the untaxed element of the taxable component, the effective tax rate is 32% or your marginal tax rate (whichever is lower).