Here’s 1 thing you can do in June to get more tax back this EOFY
The more you earn the more you can benefit from this tax tip.
Tax time is a few weeks away, which means it's time to compile a list of your deductions, find all your receipts and think about ways to help boost your return.
Did you know you can claim a tax deduction for making a contribution into your super fund?
It's very simple to do, but you do need to get onto it soon if you want to make it count this year.
What is a tax-deductible super contribution?
Everyone can contribute up to $27,500 worth of concessional contributions per year into your super fund (the money your employer pays you via the super guarantee is included in this limit).
These super contributions are taxed within your super fund at the rate of 15%, which is a lot lower than your standard income tax rate if you earn above $45,000.
Let's say you earn $100,000 and your employer has paid you $10,500 as super guarantee payments into your super fund over the past year.
You can still contribute $17,000 yourself towards your super fund as a concessional contribution, to reach your annual cap.
If you decided to make a contribution of $17,000, you'd be entitled to claim a tax deduction for this amount so it's only taxed within your super fund and not also with your standard income.
With a $100,000 salary, your income tax rate is 32.5 cents for each dollar above $45,000 (plus 2 cents per dollar for the Medicare Levy).
By sending $17,000 to your super fund instead, you'd make a tax saving of 19.5 cents for each dollar you contributed. That's $3,315 back in your tax return.
Even a contribution of $2,000 will get you back $390.
If you're in a higher tax bracket, you can save even more by making a tax-deductible super contribution.
How to make a tax-deductible super contribution this June
If you want to make a personal contribution into your super and plan to claim it as a tax deduction, make sure you do this well before 30 June.
Some super funds will have a deadline for personal contributions, which could be a few days or even a full week before the end of financial year.
Work out how much you're comfortable contributing and make the contribution via a simple bank transfer (you can do this within your fund's app or online portal).
Lastly, you need to tell your super fund you're planning to claim the contribution on tax by submitting a "Notice of intent to claim" form (you'll find this on your fund's website).
You need to send your fund the form and receive their confirmation before you can claim the contribution as a tax deduction in your tax return.
If you haven't checked how your fund is performing for a while, it could be time to compare super funds and make the switch. Switching to a high-performing super fund can help you retire with tens of thousands of dollars more (it's easy to change super funds, we promise).