The end of the financial year always seems to crop up faster than it should. Understanding what you could do before 30 June 2016 as an SMSF trustee can provide you with significant tax savings.
A couple of reminders for SMSF trustees before 30 June 2016
The end of the financial year always seems to crop up faster than it should. Understanding what you could do before 30 June 2016 as an SMSF trustee can provide you with significant tax savings. Below are a couple of reminders for SMSF trustees to review before 30 June 2016:
Draw your minimum pension amount
If you are in pension phase, make sure the minimum pension has been paid to you for this financial year. By not receiving the required minimum pension, any income earned on your pension investments in your superannuation fund will be taxed at 15% rather than being tax free if the pension rules are met by the fund. If you are unsure as to what your minimum pension amount is, please contact our office on (02) 4655-7711 as soon as possible.
Maximise your concessional (tax-deductible) contributions
For anyone who was under 49 on 30 June 2015 the maximum amount of tax deductible contributions that can be made to superannuation without penalty is $30,000. However, for anyone who is at least 49 or older on 30 June 2015 the maximum amount is $35,000. This includes amounts your employer may make as salary sacrifice, Superannuation Guarantee or you make as personal deductible contributions, if you qualify. If you wish to maximise your contributions before June 30, make sure you talk to us so we can ensure that your salary sacrifice agreement with your employer allows the maximum to be salary sacrificed.
If you are older than 65 you will need to meet a work test to contribute to super in most cases. You need to work for at least 40 hours during 30 consecutive days at any time during this financial year to make tax deductible and non-deductible contributions to super.
You may already be aware of the proposal in the recent federal budget for the maximum amount of concessional contributions allowed to decrease to $25,000 for all taxpayers from 1 July 2017.
Therefore, we suggest that you take advantage of the higher concessional contributions cap before the proposal is legislated if you are able to do so.
Please contact our office on (02) 4601 1000 if you require assistance with any of the above.