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Getting a Double Deduction for your Super Contributions?

Posted on June 7, 2021 by admin


Each year we are entitled to a tax deduction for a certain amount of superannuation contributions. The tax deduction is available to your employer if they contribute on your behalf but it can also be available to you personally when you make extra contributions to super. The amount that you can claim as a tax deduction is limited to what is known as your Concessional Contributions Cap.  There is a standard Cap of $25,000, though that is increasing to $27,500 on 1st July 2021. There are certain people that can add amounts that haven’t been used in previous years to this cap amount. If you go over your Concessional Contributions Cap, the excess contributions are merely added to your taxable income so you don’t get any tax benefits out of the contribution. For example, let’s say your Concessional Contributions Cap is $25,000 but you make $35,000 in concessional contributions.  The extra $10,000 will be added to your taxable income but you will receive a credit for the $1,500 in contributions tax paid by the super fund. But there is a little known trick to allow you to “bring forward” a tax deduction for your concessional contributions.  This “hack” is commonly […]


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Downsizer Contributions – What Are They?

Posted on June 3, 2021 by admin


If you are aged 65 years or older, you are currently able to make downsizer contributions of up to $300,000 into your superannuation fund from the sale of your main residence (as of 1 July 2018). The Federal Budget recently announced that the age limit for downsizer contribution payments will be reduced from 65 to 60 once the relevant legislation has been passed. This means that you can increase your super fund’s balance without impacting on your contribution caps (as it is not a non-concessional contribution), and this contribution can still be made even if your superannuation balance exceeds $1.6 million. It does however count towards your transfer balance cap, which is currently set at $1.6 million (increasing to $1.7 million for most people on 1 July 2021). The downsizer contributions scheme can only be accessed once, so it can only apply when you sell or dispose of one home, including selling a part interest in a home. It is a one-time deal essentially and is not a tax-deductible amount. You can however make multiple downsizer contributions from the proceeds of a single sale, but the total of the contributions cannot exceed $300,000 less than any other downsizer contributions that […]


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Removing Superannuation’s Minimum Income Threshold Limit

Posted on May 26, 2021 by admin


From 1 July 2022 employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers due to the Federal Budget’s recently announced changes to superannuation. Previously, employers did not need to pay employees superannuation guarantee payments if they did not earn $450 per month. Employees who worked for multiple employers but did not earn the same amount from a single employer were not eligible for superannuation guarantee payments. Close to $125 million of contributions was not being made due to employees not satisfying the minimum income threshold of $450. An estimated 300,000 Australians were reported to have been missing out on those contributions each year. For employees who worked in lower-income jobs or in part-time or casual employment that may not reach that minimum income threshold, this meant that they were missing out on critical payments to their super. With women making up a more significant proportion of these workers, it also caused the gender gap in superannuation already present to widen further. The removal of the minimum income threshold means now that these employees will be able to accrue super through the payments made by their employer and […]


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Removing Superannuation’s Minimum Income Threshold Limit

Posted on by admin


From 1 July 2022 employees will no longer need to meet the monthly minimum income threshold of $450 to receive superannuation guarantee payments from their employers due to the Federal Budget’s recently announced changes to superannuation. Previously, employers did not need to pay employees superannuation guarantee payments if they did not earn $450 per month. Employees who worked for multiple employers but did not earn the same amount from a single employer were not eligible for superannuation guarantee payments. Close to $125 million of contributions was not being made due to employees not satisfying the minimum income threshold of $450. An estimated 300,000 Australians were reported to have been missing out on those contributions each year. For employees who worked in lower-income jobs or in part-time or casual employment that may not reach that minimum income threshold, this meant that they were missing out on critical payments to their super. With women making up a more significant proportion of these workers, it also caused the gender gap in superannuation already present to widen further. The removal of the minimum income threshold means now that these employees will be able to accrue super through the payments made by their employer and […]


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What Does The Non-Concessional Cap Increase Mean For You?

Posted on May 18, 2021 by admin


The Federal Budget dropped on Tuesday, 11 May, with many announced amendments and changes that affected the superannuation and SMSF sectors. Non-concessional contributions increased maximum limits were announced and would come into effect as of 1 July 2021, increasing the cap from $110,000, up from the previous cap of $100,000. Personal Contributions made into an SMSF from after-tax income on which no tax deduction is claimed, known as Non-Concessional Contributions. Non Concessional Contributions are personal contributions made into your SMSF from your own personal Bank Account and not contributions to your super made by your Employer. You will be able to put non-concessional contributions into super (including using the bring-forward rule) up until age 74, without there being a need for you to work. The bring-forward rule is a provision that allows Members of a superannuation fund to make non-concessional contributions that amounted to more than the contributions cap of $100,000 in one year by utilising the cap for the next two years. It has been amended to reflect the Budget’s rulings and come into effect on 1 July 2021. You will still need to meet the work test if you wish to make tax-deductible contributions. Still, this outcome may […]


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Gender Inequality in Superannuation

Posted on May 13, 2021 by admin


Gender gaps can affect superannuation accounts as much as they can affect salary rates. With barriers to entering into fields, lower hourly rates of pay, less hours worked and more unpaid labour affecting the amount of super Australian women are retiring with, as compared to men. Currently, the median superannuation balance for men aged between 60-64 stands at $204,107 whereas the superannuation balance for women of the same age has a median total of $146,900. It’s a gender superannuation gap of 28%. This gender gap in superannuation balances can be impacted even more by women using maternity leave. With women taking their time off from work and losing out on super contributions during this period of paid parental leave, it can affect their super in the long run as it exacerbates the income and superannuation gaps that were already in effect during their employment. It can also be exacerbated by existing salary gaps across the workforce. Despite traditionally male-dominated fields experiencing high percentages of female graduates entering into the workforce, the positions that they fill are not always high-ranked, irrespective of experience. There are threeproposed measures with regard to how the superannuation gap could be addressed at a macro level. […]


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How Super For Contractors Can Work

Posted on May 5, 2021 by admin


Contractors who run their own business and sell their services to others have different obligations to their super than what employees in a business may usually have. A contractor (also known as an independent contractor, a subcontractor, or a subbie) who is paid wholly or principally for their labour is considered to be an employee for super purposes, and may be entitled to super guarantee contributions under the same rules as other employees. A contract may be considered ‘wholly or principally for labour’ if: You’re paid wholly or principally for your personal labour and skills You perform the contract work personally You’re paid for hours worked, rather than to achieve a result If hiring a contractor to perform solely their labor for a fee, the employer may also have to pay super contributions on their behalf. In this sense, if you are a contractor who is being contracted to an outside business than your own to perform your usual work or labour, your employer must contribute to your super the same way they would any other employee. This could be seen in an example of an electrician who runs their own small business, or is employed by a small business […]


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What Is A Retirement Planning Scheme?

Posted on April 21, 2021 by admin


With a significant number of Australians approaching retirement and looking at the best ways to maximise their retirement assets and income from their super for it, retirement planning makes sense. Unfortunately, there are those who want to target people approaching and planning for their retirement with schemes designed to ‘help’ retirees and prospective retirees avoid paying tax by channelling their income through a self-managed super fund. Retirement planning schemes are designed to help people avoid paying tax on the income earned through their assets (often in an illegal manner). Those schemes may seem like a simple get-rich-quick solution in maximising assets and income for retirement but can put people’s entire retirement savings at risk. Anyone can fall prey to a retirement planning scheme. Anyone who is looking to put significant amounts of money into superannuation can be at risk of being ensnared, particularly those who are over 50, and who are: SMSF trustees Self-funded retirees Small business owners Professional service providers Individuals who are involved in property investment Checking for standard features of retirement planning schemes can be an excellent way to avoid becoming tangled in one. Retirement planning schemes usually: Are artificially contrived and complex, with SMSF members often […]


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Super Co-Contributions Boost On Behalf of A Spouse

Posted on April 14, 2021 by admin


Marriage and de facto relationships come with a number of perks – but did you know that if your partner earns less than you or is not currently working, you could contribute to their super fund savings? Many households in Australia, either as a result of unemployment, maternity/paternity leave or by choice, have single income households. As a result, the retirement savings held in super for one member of these households may not be increasing as exponentially fast as the working member. The good news is that, when in a relationship, a spouse can boost their non-working partner’s super fund with their own contributions. The best part? It could be a tax write-off for the working spouse. Under Australian superannuation law, a spouse can be a legally married partner with whom you live or your de facto partner. That gives additional benefits to those in de facto relationships, who can choose (if one member of the relationship isn’t working or earns less) to boost their partner’s super fund. A spouse must also be younger than their preservation age or between 65 and their preservation age and not retired. There are two ways that someone can help their partner’s superannuation grow: […]


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What to do with your Lost Super

Posted on March 19, 2021 by admin


After COVID 19’s impact on the world, an influx of employees who had lost their jobs fell into the job market. Many of these came from companies that couldn’t afford to continue their employment. As a result, many individuals had to seek alternative employment, or draw from their super. Some individuals took on multiple jobs to pay bills, and others drew from the super that they had accumulated in the government’s early release scheme specifically for coronavirus related income loss. Super is held by superannuation funds, and accumulates as a result of how much super an employer pays to the employees’ funds. Many Australians may find that they actually possess multiple super accounts as a result of having “lost” their super accounts during changeovers. It can also happen as a result of changing names, moving addresses, living overseas or changing jobs. Australians can use the ATO’s online tools to: View details of all of their super accounts, including lost or unclaimed amounts Consolidate eligible multiple accounts (including any super held by the ATO) Withdraw your super held by the ATO when certain conditions are met. As superannuation funds often have fees associated with their upkeep, as well as insurances that […]


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Your First Tax Return: What You Need To Know

June 15, 2021

Tax return season is quickly approaching for individuals. You may need to begin thinking about the process sooner rather than later to ensure that you have everything ready for your accountant. If you’ve never had to complete a tax return before (and it’s your first time) or are still uncertain about what you need to do, this process can feel a bit like a Mount Everest you need to climb.

Putting it simply, if you are earning or will earn more than $20,542 this year, you will need to lodge a tax return. However, if you haven’t made that amount but your employer has taken tax out of your pay, you should lodge a return anyway to receive some (if not most) of that money back.

How much money you receive back from the tax return will be affected by how much income you have earned. Some debts (such as HECS or HELP) will begin to take money out of your return after reaching a certain income threshold level (currently set at $46,620).

A tax return is where you report all of your income earned over the past financial year. It should include ATO-reported income (which you generally won’t have to worry about as we have access to it automatically) such as salary or non-ATO reported income. This income may be income that has not been sent to the ATO and could include tips, any income you’ve earned while working under an ABN or payments from a family trust. You need to work out all of the income that you have earned and report it to remain compliant with the ATO.

In a tax return, you will also be entitled to make tax deductions on certain items if they apply to your situation. This means that you may receive a greater amount in your tax refund.

You will be entitled to tax deductions on items such as:

If you want to make sure that you understand precisely what you need to do to lodge your tax return, keep this in mind:

For assistance during the lodgement of your tax return, you can seek advice from us. We’re here to help ensure you meet your tax obligations by reporting your income correctly for this financial year.