Accountant GAIL FREEMAN helps a couple of clients who were leaving changes to their superannuation arrangements a little late… 

Kris wants to contribute some extra money to her industry super fund, fearful of not getting a tax refund this year. Partner Josh thinks it might be a good idea to contribute something to his self-managed superannuation fund (SMSF).

The problem was they were leaving things a bit late. When they came to see me, I told them all the large funds had cut-off dates and Kris had barely a week to get things sorted.

“You need to do it now,” I stressed.

“Both you and Josh each have a maximum of $27,500 that you can contribute and get a tax deduction, but this must be done in Kris’ case now and Josh’s by June 30 so it shows on the SMSF bank statement on or before June 30.

“Some of the other industry funds have later cut-off dates, which are shown on their web pages.

“The $27,500 includes employer contributions, so if your employer has contributed $15,000 on your behalf then you can contribute up to $12,500. You can also contribute an amount that is non-deductible up to $330,000, depending on your circumstances.

“There’s also a further amount that you may be able to contribute known as a ‘catch up concessional contribution’.

“This is calculated by the ATO and is based on the last five years using the shortfall in your contributions against the maximum that you could have contributed.

“It also requires that your total super balance is less than $500,000. So it can be useful to catch up if you have the capacity and the spare cash to do so.

“If you exceed the $27,500 limit and you do not have carry forward contributions available to you then you could be charged excess concessional contribution’s tax”.

Josh said he didn’t really understand that, but knew they had to quickly make a contribution for Kris, with a little more time for her to fine tune any contributions she might be able to make.

“Kris, to make your contribution log into the fund and follow the instructions for making a personal or number contribution,” said.

“Now I need to tell you about the all-important paperwork. You will find a form called ‘Notice of intent to claim a tax deduction for personal super contributions’ on your fund’s site. Josh, you can get one for your SMSF from the ATO site.

“The most important part of this process is that you need to receive an acknowledgement of the notice of intent form before you lodge your tax return for 2023.

“If you don’t do this, you will not receive the tax benefit as part of your refund as the superannuation contribution will not be processed.”

Kris said it was now clear they just about had time to make the contributions this financial year and get some benefit from them.

If you have any questions on superannuation or tax contact the experts at Gail Freeman & Co Pty Ltd on 02 6295 2844, email info@gailfreeman.com.au or visit gailfreeman.com.au

Disclaimer
This column contains general advice, please do not rely on it. If you require specific advice on this topic please contact Gail Freeman or your professional adviser. Authorised Representative of Lifespan Financial Planning Pty Ltd AFS Lic No. 229892.