You may be able to claim a tax deduction for personal super contributions that you made to your super fund from your after-tax income, for example, from your bank account directly to your super fund.
Notice of Intent
Before you can claim a deduction for your personal super contributions, you must give your super fund a Notice of intent to claim or vary a deduction for personal contributions form (NAT 71121). You must then receive a letter from your Superfund acknowledging your contribution was received prior to 30 June.
There are other eligibility criteria that you must meet.
People eligible to claim a deduction for personal contributions include people who get their income from:
- salary and wages
- a personal business (for example, people who are self-employed contractors, or freelancers)
- investments (including interest, dividends, rent, and capital gains)
- government pensions or allowances
- partnership or trust distributions
- a foreign source.
The personal super contributions that you claim as a deduction will count towards your concessional contributions cap. When deciding whether to claim a deduction for super contributions, you should consider the super impacts that may arise from this, including whether:
- you will exceed your contribution caps
- Division 293 tax applies to you
- you wish to split your contributions with your spouse
- it will affect your super co-contribution eligibility.
If you exceed your cap, you will have to pay extra tax and any excess concessional contributions will count towards your non-concessional contributions cap.
Concessional contribution caps
For the 2020-21 financial years, the general concessional contributions cap is $25,000 for all individuals regardless of age.
Non-concessional contributions and contribution caps
Non-concessional contributions are:
- from your after-tax income
- not taxed in your super fund.
From 1 July 2017 to 30 June 2021, the non-concessional contributions cap is $100,000.
To find out more about individual super contributions read more from the ATO’s website.
To understand more about what contributions would best suit your personal situation, give us a call today.