From 1 July 2017, individual tax payers will be able to claim a tax deduction when making an eligible, post-tax super contribution to their super fund. This deduction was previously only available to self-employed individuals but it is now available to all tax payers.
This change improves the flexibility of the super system so that most people under 65 years of age can claim a tax deduction for post-tax super contributions.
What is a post-tax contribution?
A post-tax contribution is one you make from your take home pay.
Are there any restrictions?
Those aged 65 to 74 will need to satisfy the work test, where you must work at least 40 hours during a consecutive 30 day period each financial year, in order for your super fund to accept a contribution for which you can claim a deduction.
In addition, there is a limit on the amount of contributions you can make each year. It is therefore important to check with your financial advisor as to what limits apply to your specific circumstance as exceeding your limits may mean you have to pay extra tax!
What do I need to do to claim a deduction?
If you are eligible and want to claim a tax deduction you will need to complete a ‘Notice of intention to claim a deduction’ form. This form must be sent to your super fund and you will need to receive an acknowledgement of your intention from your super fund before you lodge (or are due to lodge) your tax return for the year that you wish to claim a deduction.
If you would like to discuss further how to ensure that you take advantage of the tax deductions for post-tax super contributions, please contact us on 6621 2257.
This information and the links provided are for general advice only and do not take into account your specific situation and, accordingly, should not be taken as constituting professional advice.