TAX PLANNING 2020

TAX PLANNING 2020

TIP #1 – SUPERANNUATION

 

Did you know that your super fund pays tax on “concessional contributions” at 15%, which makes your super a great channel through which to save some annual tax dollars!

Concessional contributions are:

🚩 Super Guarantee (SGC) currently 9.5% which is contributed by your employer;

🚩 Salary Sacrifice contributions, also contributed by your employer; and

🚩 Personal contributions for which you claim an income tax deduction

Concessional contributions are subject to a yearly cap which is currently $25,000.

AND since 1 July 2018 if you have a superannuation balance less than $500k, you can carry forward your concessional contributions, and access them on a rolling basis for 5 years! 2020 is the first year that you will be able to access your unused concessional contributions.

If you are interest in saving some real tax money, make super one of your strategies, not just in the lead up to year end, but throughout the year as well, so that you spread out an otherwise high impact on your cash flow.

What to be aware of:

✅ BE PREPARED well in advance of 30 June 2020, ensure your fund RECEIVES the contribution to its bank account before this date.

✅ TAKE CARE not to exceed concessional cap, as this will defeat the purpose of the exercise, your excess being taxed at your marginal tax rate.

✅ REMEMBER that super locks your money away until retirement, so ensure that your contributions are made with what we call “spare” cash (as opposed to “necessary” cash)

✅ ALWAYS consult your wealth plan, and make decisions based on wealth strategy before you make decisions based on tax.

 

If you have any questions at all regarding financial and business matters, please don’t hesitate to contact me by email or phone.