A consistent theme this tax time is over-claiming and under reporting.
With the Australian Taxation Office (ATO) getting more and more sophisticated in its approach to data matching, taxpayers can expect greater scrutiny where their claims are more than what is expected.
Not making your full superannuation contribution? Now you can catch up
This year is the first year of new measures that enable people who have been out of the work force, like new Mums, to top up their superannuation.
If you have:
- A total superannuation balance below $500,000 as at 30 June; and
- Not utilised your entire concessional contributions cap ($25,000) for the year
then you can ‘carry forward’ the unused amount on a rolling 5 year basis.
For example, if your total concessional contributions in the 2018-19 financial year were $10,000 and you meet the eligibility criteria, then you can carry forward the unused $15,000 over the next 5 years. You may then be able to make a higher deductible personal contribution in a later financial year. If you are selling an asset and likely to make a taxable capital gain, a higher deductible personal contribution may assist in reducing your tax liability in the year of sale.
- Your total superannuation balance must be below $500,000 as at 30 June of the prior year before you utilise any carried forward amount (within the 5 year term); and
- In some cases, an additional 15% tax can apply (30% total) to concessional contributions made to super where income and concessional contributions exceeds certain thresholds ($250,000 in 2018-19). Your income could be higher than usual in the year when you sell an asset for a capital gain.