Spouse contributions

The spouse super tax offset allows higher earning taxpayers who contribute super for their non-working or low income earning partners to be eligible for a tax break.

To be eligible for this benefit the lower earnings spouses’ income, total reportable fringe benefits, and reportable employer superannuation must have been less than $13,800 in the financial year.

Salary sacrifice

A salary sacrifice arrangement is where an individual agrees to forego part of their future salary or wages in return for their employer providing benefits of a similar value. Salary sacrifice contributions count towards an individual’s concessional contributions cap.

Government co-contributions

The Government co-contribution scheme is an initiative for Australians to make a bigger commitment to their super savings and to give individuals more money to add to their superannuation fund.

Eligible Australians who earned less than $33,516 in the 2013/2014 financial year will receive 50 cents for every dollar, up to a maximum of $500, of after-tax money that they contribute to their super account.

Individuals who earn over $33,516 will have their Government co-contribution reduced by around three cents for every dollar over that amount, up until it reaches zero at $48,516.

To be eligible individuals must under 71 years, and make at least one personal super contribution and be a permanent resident or citizen.

Concessional contributions

The 2014-15 financial year will see an increase in the concessional contributions cap. The present cap of $25,000 will increase up to $30,000.

The indexation will not apply to the temporary higher cap of $35,000 currently available to those individuals 59 and over as at 30 June 2013 (for 2013-14). However, the temporary higher cap will extend to individuals who are 49 and over as at 30 June 2014, and will apply for the 2014-15 financial year.

Non-concessional contributions

The indexation of the concessional contributions caps has some flow-on effects the non-concessional contributions cap. Therefore, from 1 July 2014 the non concessional contributions cap will increase from $150,000 to $180,000.

Call the team at Leenane Templeton if you wish to discuss super contributions further.

Disclaimer.

The post Year end super strategies appeared first on Newcastle Financial Planners & Financial Advisors.

There are a few common financial planning strategies that may be appropriate for businesses and individuals looking to take control of their finances and plan for the future.

Concessional contributions.

The contributions cap for concessional contributions for those aged over and under 50 is $25,000 for the 2012/2013 financial year. Those which have exceeded this limit will face a penalty tax of 31.5%, in addition to the 15% tax payable on contribution. The excess concessional contributions also count towards the non-concessional cap. For those aged 65 or over, they must first satisfy a work test in order to make super contributions.

Government co-contributions.

There are government incentives in place for making after-tax contributions to super, with the government co-contribution scheme designed for low to middle income earners earning up to $46,920 (2012/2013). For those who have made an after tax contribution and are earning up to $31,920, the government will contribute up to a maximum of $500 tax-free into the super fund. For example if the non-concessional contribution  is $800 for someone earning up to $31,920, then the Government will contribute $400, representing an instant return of up to 50% on contributions.

The amount the government contributes decreases by 3.33c for every dollar above the $31,920 and cuts out at $46,920. It is exempt from being included as income in tax returns.

Spousal contributions.

Making an after-tax contribution to a dependant spouses’ superannuation account can result in a tax offset, provided that the spouse is under 65, or up to 70, provided they are still working.

Those who contribute at least $3,000 to the spouses’ account are eligible for the full tax rebate of $540, as long as their spouses’ assessable income is less than $10,800 for the year. If less than $3,000 is contributed then the rebate will be equivalent to 18% of the contributions.

If the spouses' income is higher than $10,800, the rebate decreases until it is capped if the income exceeds $13,800 a year.

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The post Personal Super Strategies for Year End appeared first on Newcastle Financial Planners & Financial Advisors.