Types of Contributions– Concessional Contributions: Generally, concessional contributions will be claimed as tax deduction in other entitles and will be tax at 15% in your super fund. To see what are included in the concessional contributions and what are not, check the ATO Super Contributions. (the link is: http://www.ato.gov.au/super/content.aspx?menuid=0&doc=/content/00106372.htm&page=3&H3)
– Non-concessional Contributions: Non-concessional contributions are sometimes known as ‘after-tax’ contributions. These contributionsbasically will not be claimed as deductions anywhere and will not be taxed in your super fund. To see what are included in the non-concessional contributions, check ATO Non-concessional Contributions (the link is:http://www.ato.gov.au/super/content.aspx?menuid=0&doc=/content/00106372.htm&page=8&H8)
The work tests:
– After you turn 65, you have to have to work at least 40 hours in any 30 day consecutive period during the financial year in which you make the contribution.
– The work tests apply to both concessional and non-concessional contributions.
The Three Year Bring Forward Rule
If you are under 65, the three year bring forward rules allows you to to bring forward two additional future years of contributions to make a larger one off contribution in the current financial year.
You can split your concessional contribution up to 85% to your partner. The restrictions are that your partner must be under 65 and mustn’t have permanently retired. It works well if your partner is older than you because he/she can establish the pension account soon. To split, simply download the form here and forward it to ATO. (the link is http://www.ato.gov.au/content/downloads/SPR86436n15237.pdf)
You may claim a tax offset up to $540 if you make contributions on half of your partners. Click here to see how. (The link is http://www.ato.gov.au/super/content.aspx?doc=/content/19144.htm)
Excess Contribution Tax
If you make contribution that exceeds the current contribution caps, you may be liable for the excess contributions tax. To get the details information about excess contribution tax, click ATO Excess contributions tax learner guide. (The link ishttp://www.ato.gov.au/taxprofessionals/content.aspx?menuid=0&doc=/content/00302422.htm&page=3&H3)
If you have receive a excess contribution assessment notice from ATO, you need to contact us and we will try to find a solution for you and your SMSF.