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Boost your nest egg while saving tax

Some new rules have come into play that may allow you to claim a tax deduction if you put extra money into super…. but you need to act before the end of June to get the benefit in your 2017-18 tax return.

New ATO rules now allow eligible salary and wage earners (under 75 years old) to put extra contributions into super and claim it as a tax deduction. Previously you could only do that if less than 10% of your earnings was from salary or wages – so it was really only a tax deduction for people who were self-employed.  It was commonly known as the 10% rule.  Effective 1 July 2017, the 10% rule was removed for the 2017-18 and future financial years. This means most people can now claim a tax deduction for personal super contributions (including those aged 65 to 74 who meet the work test). But you must notify your fund in writing of the amount you intend to claim as a deduction within the required timeframe.

So while you might think that tax planning is for businesses only, as a salary and wage earner you can benefit greatly from booking a Tax Update Appointment with BMO before the end of June.  We can also use this “Tax Update” to look at any ways we can reduce your tax liability or improve your financial position through other strategies like rental property deductions and salary sacrificing.

Don’t invest in super just to save tax, make sure it lines up with your long term goals, which is why we recommend that you seek professional advice, as everyone’s situation is different.

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Michelle McVeigh

About the author

Determination, high technical competence and empathy for clients are qualities that characterise Michelle McVeigh. After Michelle completed her Bachelor of Business (Accounting), she launched her career working in accounting and finance in the cotton industry. In 1994, Michelle joined BMO and went on to become a partner in 2008. She has extensive taxation and accounting experience, is a READ MORE

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