Come the close of the financial year and SMSF trustees begin looking for plans and strategy to maximise their superannuation benefits. Many techniques can be employed to optimise returns by June 30. I know after-tax contributions come to the mind first but they are not the only one in the wings.
Tax deductible contributions
Take for instance the higher tax deductible Super contributions which can be used by investors over 60 years of age. Let me dig a little deeper.
Be cautious of the upper cap
Let us say you fancy minimising your tax returns. Now, after-tax Super contributions, made ideally from personal savings like inheritance could be a great way to give tax a slip. $150,000 is the upper ceiling for after-tax contributions this year. Being over 60 gives you the additional benefit of putting in $450,000 over a three year tenure. This said, keep in mind not to overdo the contributions. Going overboard can have you incur penalties which are as exorbitant as 46.5%.
A reprieve of further $30,000
There is further impetus in this direction, come July 2014. The figure $150,000 gets a boost of $30,000 and you can make after-tax contributions of up to $180,000. Similarly, those over 60 can extend till $540,000 for the three-year period.
If you are above 60, your superannuation guarantee or salary sacrifices will allow you a maximum ceiling of $35,000 as tax deductible contribution. It is imperative to talk to one’s tax agent or account manager in order to facilitate maximum salary sacrifice before 30th June. All for the purpose of maximising contributions!
The clock is ticking and before 1st July we need to ensure that we meet the pension rules, optimise our SMSF income and deductions and get the best out of super contribution’s tax benefits.
