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Income protection insurance: An often overlooked tax deduction

Many Australians overlook the fact that they can claim the premiums paid for income protection insurance as a tax deduction. Income protection insurance policies are designed to protect you in the event that you become unable to work due to illness or injury. Most policies will pay you a pre-determined portion of your previous income, meaning that you will be able to maintain necessities such as mortgage repayments and groceries.

It is advisable for everyone to think about whether or not they can afford not to have income protection insurance. However, if you are the breadwinner in your household or have a significant amount of debt, then income protection insurance is an even more critical investment.

The high premiums associated with income protection insurance policies can see a lot of people justifying not purchasing one. However, it is also common for taxpayers to be unaware that they can claim income protection insurance premiums as a tax deduction, thus making significant savings on their overall tax bill.

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SMSFs: beware of illegal early super release

July 13, 2018

The Australian Tax Office (ATO) is reminding self-managed super fund (SMSF) trustees to beware of allowing members to access their super early.

A self-managed super fund (SMSF) trustee must meet a condition of release before any funds can legally be released.

The ATO can issue severe penalties if you or a SMSF member access your super before you are legally entitled to do so.

Some consequences of getting caught up in an illegal super scheme include the disqualification of trustees, imposition of administrative penalties, the fund being made non-complying and prosecution.

The Tax Office encourages those members who have been involved in an illegal super scheme to contact them immediately. The ATO will review your voluntary disclosure and take your circumstances into account when determining any penalties.