There are only a few weeks before June 30th and if you need a few strategies to increase your tax savings, then you are reading the right article.
If you are able to adjust your income to be less than 48,516 dollars, then, you can make an after-tax super contribution for government payment. For each dollar you put, the government would add 50 cents to your super to the maximum of 500 dollars.
If your spouse earns less than 10,800 dollars, and could make a payment up to, three thousand dollars into the high earning spouse’s super fund, then the higher earning spouse would get 18% offset for the tax in the income tax for the contribution. The maximum offset is 540 dollars.
After tax contribution
Many people can make after tax contribution. The contribution up to 450 thousand dollars can be made over three years. This means that the contributions of 150 thousand dollars or more can be made in a single year, provided, the total contribution for the three years would not exceed the limit of, 450 thousand dollars.
From July 1, 2014, the contribution cap increases to 180 thousand dollars. This indicates that over a three year period, an individual can contribute to a maximum of 540 thousand dollars. There are a few restrictions like the age, spouse contribution and others.
The salary sacrificing is another way of improving the super. The marginal rate of the income tax is swapped for 15% contribution tax, which is 30% for those who are earning more than 300 thousand dollars per year. The caps would increase by July, 1, 2014 from 25 thousand dollars to 30 thousand dollars. For the people who are above the age of 50, the cap will be increased to 35 thousand dollars. The cap also includes the compulsory contribution which will be increased from 9.25 percentage of the wage to 9.5%.
Contact your super fund advisor to know about the options that you have to improve your super. The options vary from one individual to another. However, it is important to know to leave a few months before the end of the year (financial year) to start the processing time for the superannuation funds. The time is used to determine whether you would be in need to sacrifice an amount from your salary into your super fund.
There is a lot more information on Super than the ones that are discussed in this article. If you are not comfortable in making decisions on your own, do not think twice to get professional financial help.