Did you know that you can contribute too much to super? In fact, it can result in you having to pay extra tax.
Firstly, there are basically two (2) types of contributions. There are contributions where the payer (either an employer or a self-employed person) wants to claim a tax deduction – these are known as concessional contributions. Then there are contributions where the payer does not want to claim a tax deduction – these are known as non-concessional contributions.
Super funds pay 15% tax on all concessional contributions and nil tax on non-concessional contributions.
However, if you make concessional contributions that exceed $25,000 ($50,000 if aged 50 years or older) in a year, you will have to pay an additional 31.5% on the excess over $25,000.
If you make non-concessional contributions that exceed $150,000 ($450,000 if aged less than 65 years) in a year, the fund pays 46.5% on the excess over $150,000.
If you think that it is bad, it gets worse!
If you exceed both the concessional and non-concessional contribution limits in the same year, the combined tax rate is 93%!
Some of you might be currently drawing a pension/income stream from your super fund. You also might be in a position where you want to contribute a lump sum back into your super fund. This strategy makes a lot of sense as a super fund will not pay tax on its earnings when it is paying a pension(s) to its members. However, if the contribution is made at the wrong time or in the wrong way, the tax-free status of the super fund is placed into jeopardy.
The point is, we would strongly encourage you to discuss and super contributions you are going to make with us before you make them. Otherwise, some of the above “bad news” may apply to you.
Key lodgment dates
Below is a summary of the key lodgment dates from now until June 2012.
14 Aug 2011 PAYG withholding payment summary annual report
21 Aug 2011 July 2011 monthly activity statements
25 Aug 2011 June 2011 quarterly BAS (if lodged by Ellingsen Partners)
21 Sep 2011 August 2011 monthly activity statements
21 Oct 2011 September 2011 monthly activity statements
Annual PAYG instalment
28 Oct 2011 Employee superannuation for the July to September 2011 quarter
31 Oct 2011 Prior year tax returns
21 Nov 2011 October 2011 monthly activity statements
25 Nov 2011 September 2011 quarterly BAS (if lodged by Ellingsen Partners)
21 Dec 2011 November 2011 monthly activity statements
21 Jan 2012 December 2011 monthly activity statements
28 Jan 2012 Employee superannuation for the October to December 2011 quarter
21 Feb 2012 January 2012 monthly activity statements
28 Feb2012 December 2011 quarterly BAS (if lodged by Ellingsen Partners)
New self-managed superannuation funds
21 Mar 2012 February 2012 monthly activity statements
Tax liability if tax return lodged before 13 February 2012
31 Mar 2012 Company tax return where prior year turnover exceeds $2 million
21 Apr 2012 March 2012 monthly activity statements
Tax liability if tax return lodged between 13 February 2012 and 12 March 2012
28 Apr 2012 Employee superannuation for the January to March 2012 quarter
15 May 2012 Income tax returns
21 May 2012 April 2012 monthly activity statements
25 May 2012 March 2012 quarterly BAS (if lodged by Ellingsen Partners)
05 Jun 2012 Tax liability if tax return lodged after 12 March 2012
21 Jun 2012 May 2012 monthly activity statements