Hot tips for the End of Financial Year – Part 2

Forget the champagne – our accountants know how to prep for a great New year!

Welcome to the second installment of our Hot Tips for the End of Financial Year. This week we’re focusing in on spouse contribution tax offset and low income super contributions.

3. Spouse contribution tax offset

Background

Spouse contributions tax offset applies to superannuation contributions made on behalf of non-working or low income-earning spouses, whether married or defacto. The maximum tax offset is 18% of super contributions of up to $3,000 resulting in a tax offset of $540 (maximum) each financial year.

To be eligible, the spouse receiving the contribution must have income less than $13,800 in the relevant financial year.

Case Study

Jason and Natalie are age 45 and 50 with 2 children. Jason works full time earning $100,000 per annum whereas Natalie is currently not working as she is looking after the children.

Jason can make a non-concessional (after tax) contribution of $3,000 into superannuation for Natalie before 30 June 2015. This will entitle Jason to a tax offset of $540 which he will be eligible to claim in his 2015 tax return.

4. Low income super contribution 

Background

The low income super contribution (LISC) is a government superannuation payment of up to $500 to help low-income earners save for retirement. Individuals earning $37,000 or less a year from employment or self-employment, may be eligible to receive a LISC payment.

Case study

Maria earns $33,000 per annum as a childcare assistant. In the 2015 year Maria’s employer makes a super guarantee (SG) contribution of $3,135 into her super fund. Upon lodging her 2015 tax return, Maria will be entitled to a low income super contribution of $470 (being 15% of the $3,135 SG contribution) paid directly into her superannuation account.

Maria must lodge a 2015 tax return to claim the low income super contributions.

 

 

The information presented is general in nature and not to be used, relied or acted upon without seeking professional advice to ensure that the information appropriate for your individual circumstances. William Buck accepts no liability for any errors or omissions, or for any loss or damage suffered as a result of any person acting without such advice.