Super strategies to consider for the end of financial year
With the end of the financial year fast approaching, it’s a great time to build and protect your wealth in a tax-effective manner.
However, you’ll need to take action soon so you can put these smart strategies into place before 30 June.
Below outlines 8 strategies with tax advantages for this financial year and beyond. Each of these strategies has the potential to make a significant difference to your financial situation now and in the future.
In the current economic climate, it can be even more important to be tax smart. Just a little bit of planning can help boost your retirement savings, maximise your Government entitlements and reduce your tax.
Are you likely to receive a bonus from your employer?
You may want to salary sacrifice your bonus into super rather than receive it as cash. This is so you can reduce tax on your bonus by up to 31.5% and / or make a greater after-tax investment.
Do you earn less than 10% of your income¹ from eligible employment? (eg you are self-employed or not employed?)
You may want to invest in super and claim your contribution as a tax deduction. You can use the deduction to offset taxable income, save on tax, and build and protect wealth outside your business (if applicable).
Do you earn less than $61,920¹ pa, of which at least 10% is from employment or a business?
You may want to make a personal after-tax super contribution so you can qualify for a Government co-contribution of up to $1,000 and increase your retirement savings.
Do you have a spouse who earns less than $13,800¹ p.a.?
You may want to make an after-tax super contribution on their behalf so you can receive a tax offset of up to $540 and increase your spouse’s retirement savings.
Do you have an investment in your own name?
You may want to cash out the investment and use the money to make a personal after-tax super contribution so you can reduce tax on investment earnings by up to 31.5% and increase you retirement savings.
Did you make a capital gain on the sale of an asset this financial year and earn less than 10% of your income from eligible employment?
You may want to invest the sale proceeds in super and claim a portion of the contribution as a tax deduction. This is so you can use the deduction to offset your taxable capital gain, save on tax and increase your retirement savings.
Are you eligible to make salary sacrifice super contributions, eligible to receive Government co-contributions, have a spouse who earns less than, $13,800¹ p.a, or earn less than 10% of your income from eligible employment?
You may want to purchase life and total permanent disability insurance in a super fund so you can benefit from tax concessions and make premiums more affordable.
Are you under age 60 and want to cash out some of your super?
You may want to delay the withdrawal until you reach an older age bracket (e.g. 60 years and over). This is so you can save lump sum tax and maker a larger after-tax investment.
Note: To use the above strategies you generally need to be eligible to make super contributions. Furthermore, you won’t be able to access your super until you satisfy a condition of release. See a financial adviser for more information.
¹Includes assessable income, reportable fringe benefits and reportable employer super contributions. Other eligibility conditions apply
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