Hot Tips for the End of Financial Year – Part 3

Welcome to our third installment of 10 Hot Tips for the End of Financial Year. This week we are looking at super co-contribution and medical tax offset for self-funded age care retirees.

5. Super co-contribution

Background

Low or middle-income earners may be eligible for a maximum amount of $500 from the government super co-contribution scheme to help boost their retirement savings.

To be eligible, individuals must make a non-concessional (after tax) contribution to their superannuation and must not earn in excess of $49,488 for the 2015 financial year.

Case study

Maria earns $33,000 a year as a childcare assistant. In 2014/15 year Maria’s employer makes a super guarantee (SG) contribution of $3,135 (9.5%) into her super fund and in addition Maria makes an after tax contribution of $1,000. Upon lodging her 2015 tax return, Maria will be entitled to a super co-contribution of $500 (being 50% of the $1,000 after tax contribution) paid directly into her superannuation account. This amount is in addition to the $470 (LISC) her super fund will receive on her employer SG contribution. Please see section Low Income Super Contribution (LISC) for more details.

Maria must also lodge 2015 tax return to claim the co-contribution.

6. Instant write off of low cost assets for small business owners

Background

An immediate deduction is available for depreciating assets costing $1,000 or less that are used in the course of running a small business.

Case Study

Barry runs a small business and wishes to purchase a laptop valued at $850 and a printer valued at $900 for business use prior to 30 June 2015. As each of the asset is less than $1,000 Barry can claim a total of $1,750 as a deduction against his business income resulting in reduced tax liability for the 2015 year.

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.