How To Claim Tax Deductions from Your Super Payments?
If you are interested in contributing towards your super fund you will also be interested in making the most interest on your dollar and paying the least possible (or legally) in taxes. A good way to reduce your tax bills is to declare your super payments as deductions to your tax payable income.
If all these terms and ideas seem a little complicated and are flying way over your head stay with us for a little more for a basic description of how you can reduce your tax payments on your super fund benefits and payments.
Your first question should be if you are eligible to apply for a tax deduction on your super contribution.
Here is a list of the main requirements.
1) You must have satisfied the maximum earnings as an employee condition.
This means that you can still claim tax on your super contribution whether you or your employer paid the super as long as you income as an employee represents only 10% of your income.
Lets illustrate this with an example. Imagine you own a company or business which is your main source of income. You also work sometimes as a contractor. If the income from your “secondary” source of work is less than 10% of your total income you could claim a tax deduction on your super contributions.
2) You must meet the age conditions.
This means you must be under 75 and over 18 to qualify for tax deductions. If you are close to these ages there is a little more details to deal with. If you are 75 or over you can only claim for deductions when the contributions you are claiming for occurred on the same month you turned 75 or earlier.
On the other hand if you are under 18 at the end of the income year you are only allowed to claim for deductions if you actually worked during that year.
3) Your contributions were to a complying super fund or attached account or savings plan.
4) You made the contributions to the super fund so that you or your beneficiaries can benefit from the super fund. Yes, this one mystified me too. But, hey it is an easy one to comply with.
5) You must have filled in and filed the Deduction for Personal Super Contributions form and advised you Super Fund on how much your claiming or planning to claim as a deduction. Your super fund must have in turn agreed on the amount you intend to claim for.
Now you are ready to fight your case and make all the tax deductions you can on your super contributions. For more information and to download the forms you need you can visit the Australian Taxation Office website at www.ato.gov.au . Happy claiming!