We’re nearing the end of another financial year, so as always there are some thing to be mindful of if you need to act on things such as minimum withdrawals for superannuation or take advantage of expiring caps or contribution limits. tax savings.
Tax Savings via Concessional Contributions
With the Stage 3 tax cuts now in effect, many Australians are on lower marginal tax rates, but making voluntary concessional contributions still offers the most significant tax advantages for those in an income threshold which pays tax.
For example, someone earning $80,000 saw their marginal tax rate fall to 32%, down from 34.5% in 23/24, but that’s still more than double the super tax rate of 15%, which underlines the benefit of concessional contributions when saving money for retirement.
Higher Contribution Caps
From 1 July 2024, the Concessional Contributions Cap increased from $27,500 to $30,000. This also raised the maximum five-year carry-forward cap to $162,500, assuming eligibility (i.e., total super balance under $500,000 as of 30 June 2024).
Last Chance to Use Unused Caps from 2019/20
If you have unused concessional contributions from the 2019/20 financial year, this is your final opportunity to use them under the carry-forward rules. It’s easy to check your available cap space via your MyGov account linked to the ATO, alternatively check with your adviser.
Super Pension Minimum Withdrawals
A reminder super pension minimum withdrawals did revert back to the standard or long-term minimums in 22/23, after they were halved due to covid. Ensure your super pension meets the minimum withdrawal requirements based on your age and account balance as of 1 July 2024.
Spouse Contributions
You may be eligible for a tax offset of up to $540 if you contribute up to $3,000 to your spouse’s super and their income is $37,000 or less. The offset phases out completely at $40,000.
Capital Gains (& Losses)
Now is a good time to review your portfolio if you’ve been dabbling with stock picks and they haven’t been successful. And if you have realised capital gains, you can consider realising those losses to offset them. This can help reduce your overall tax liability.
Prepaying Deductible Expenses
If you have tax-deductible expenses coming up in the next financial year, consider bringing them forward. This includes:
Investment loan interest
Income protection insurance
Private health insurance
Work-related subscriptions or memberships
Time of Processing
A final reminder on everything, whether money needs to enter the super environment, or exit the super environment, don’t leave an attempt to process a transaction until the last minute. Super funds usually suggest BPay payments are made by June 27 (which is a Friday this year) to make the cut off. We’d suggest taking action by June 23 or earlier.
Scams & Cybersecurity
A final, final reminder on the ever present danger of being fleeced. Periods like the end of a financial year can prompt scammers to increase their efforts in an attempt to dupe people. As always, be mindful of fake emails, weird phone calls, or fraudulent invoices. Fake Australia Post and Telstra messages about package deliveries and expiring Telstra points have started again recently, so remain vigilant.
This represents general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your personal investment objectives, financial situation and individual needs.
