Video není dostupné.
Omlouváme se.
Reduce Your Tax by Thousands With Unused Concessional Contributions
Vložit
- čas přidán 15. 08. 2024
- Learn what carry-forward unused concessional contributions are and how to optimise your contribution strategy each financial year.
😎 BECOME A SUPERGUY INSIDER (100% free) 😎
Access advanced tutorials, bonus training, and exclusive super tips! ► www.superguy.c...
🔔 SUBSCRIBE FOR MORE VIDEOS
► / @superguyau
📈 Resources to boost your super & build your own retirement plan:
► How Much Super Do You Need to Retire Comfortably: bit.ly/364JN5h
► How Long Will My Money Last in Retirement: bit.ly/3hcIibz
► How Much Super Should You Have: bit.ly/3hpcFu1
► How Much Can You Contribute to Super? bit.ly/3jBLH5k
► When Can You Access Your Super: bit.ly/3htrlIC
► Should You Withdraw Super to Pay Debt: bit.ly/3hbtr0V
► When Can You Access Your Super Tax Free: bit.ly/3h95JCh
► How Much Super Do You Need to Retire At 60: bit.ly/3dzy1E1
Related Content:
► Intent to Claim a Tax Deduction form: www.ato.gov.au...
► Types of Super Contributions: • 4 Types of Superannuat...
⏱ Timestamps
00:00 - Carry Forward Unused Concessional Contributions
01:26 - How Unused Contributions Work
02:31 - When Should You Use Unused Contributions
02:54 - Are You Eligible To Use Unused Contributions?
03:57 - Are You Comfortable Unused Contributions?
04:37 - Optimising Your Unused Contributions
06:51 - When You Shouldn’t Use Unused Contributions
07:35 - Case Study Example: How To Use Unused Contributions
13:18 - Things To Be Mindful Of
😍 Like this video? Please hit the thumbs up button👍 and leave us a comment below. ⏬
Carry-Forward Unused Concessional Contributions Can Save You Thousands
Unused concessional contributions are arguably the most underutilised tax-effective superannuation strategy for people with superannuation balances below $500,000.
Each year, your unused concessional contributions from previous years are carried forward for up to five financial years.
By contributing some or all of your unused amounts to super via salary sacrifice or personal concessional contributions, you can bring your personal income tax down to $0 - saving you tens-of-thousands of dollars each financial year.
In this video, I’m going to explain how unused contributions work, when you should and shouldn’t use them, how to find out your unused amounts and how you can calculate the precise amount you should be using each year.
#SuperGuy #ChrisStrano #Superannuation #RetirementPlanning
DISCLAIMER: The SuperGuy website and SuperGuy CZcams channel contains general advice only. It is not personal advice as it does not take your specific needs or circumstances into consideration. Therefore, you should look at your own financial position, objectives and requirements and seek personal financial advice before making any financial decisions.
General advice is provided by Toro Wealth Pty Ltd trading as SuperGuy Retirement Experts as an Authorised Representative of Core Value FA Pty Ltd (AFSL 480387).
Before acting on any information, you should seek professional advice and verify our interpretation/s before relying on the content or calculators within this website or on the videos, while also considering its appropriateness in relation to your personal situation.
Yes, you can carry forward unused concessional contributions to future years.
That’s absolutely right. It can also be used to reduce your taxable income
And how far back can one carry forward unused contributions please?
@@GibsonJames-gr3onIn Australia, one can afford to carry up to 5 years of unused concessional contributions.
@@LilianScott-dy5nz So what are the processes to carry forward unused contributions?
@@Wade453You just need to fill out and submit a form to the ATO specifying the amount you want to carry forward.
I used this strategy last financial year. Asked my accountant to prepare our returns but not lodge. That way I knew exactly how much to notify intent to claim. Bought our income tax down to zero. Of course we had already made non concessional contributions in exess of what was needed.
Note that that intent form does not have to lodged before end of financial year. But must be done before lodging tax returns.
Can you please explain with dummy number? Appreciate your help
We don't bother going under $45K with deductions for super. The income tax rate is 19% plus medicare levy vs super tax rate of 15%, so only gaining 4-6% or so there for locking up funds until retirement or 65 years or age. However, in the example Anthony is 62 years of age, so there's that. The next financial year 2024-25 the $18,201 to $25,000 income tax bracket is 16%, so only 1-3% benefit there for using this strategy. Each to their own. Good video. Explains it well.
Agree, the 21k amount in this video should be 46-48k to be aware of other deductions, to optimise the 45k marginal tax point and only pay 5,092 tax plus 900 medicare, thus 5,992 total.
Yeah but that 15% tax saving would compound over time
@@method341if you can afford those extra funds into super down to 21k....
YOU ARE BETTER HOLDING THE FUNDS OUTSIDE SUPER in a similar investment to your super, such as an S&P500 ETF, as they would track as well, without fees AND BE INSTANTLY LIQUIDATED AS REQUIRED, not locked away until 60-67yo.
@@method341 Well, it's not a 15% tax saving, it's only a 4% saving in the $18-$45K tax bracket, but yeah, I agree, the tax saving (whatever amount it is) will compound over time. So long as someone can put food on the table and keep a roof over their head in the short term, or maybe invest that money elsewhere outside of super, if someone chooses to have a much lower income for the sake of 4%, then go for it. Next year it will be only a 1% difference in this tax bracket between taking the income as take home pay versus putting it in super. Choices, choices...
@@Michael_Mearsand investing sonewhere else could also mean instant liquidity vs locked away and zero fees vs superfund fees.
Michael, your strategy is EXACTLY my strategy and I 100% support.
I did this this year after hearing about it. I put in $68k lost $10200 to the 15% super tax and gained $23k back in income tax so net was $12800 in my favour. I will be doing this next year with a smaller amount.
At 55 Pity the super concession stops at approx $30k only 10 years till retirement we need to put as much as we can invest take pressure of housing , & invest surplus in super not negative gear property, we can put less pressure on pension
Agreed - I think at 55 years plus we should be able to contribute upto $100K per year until retirement age
Excellent, timely video !! Thanks a million Chris !!!
Glad it was helpful!
Working hard to clear my unused amounts. 3 years into a 5 year plan and so far so good. Getting close to limit so before June 30 next year might need to make a bit of a 1 off to clear. After that will drop amount salary sacrificed to try and maximise contribution limit. 59 years old and kids gone so have been able to live off reduced take home pay.
Nice work!
This is such valuable information so thank you. I am 63 have not worked the past two years due to health issues. I am however looking at using the carry forward super contributions once I secure new employment. I’m looking at carrying forward the full $55,000 representing the last 2 years’ concessional caps. I’ll speak with my super fund tomorrow to get this started
You're welome!
I have done this just recently and noticed in my tax account that it is showing as a non concessional contribution. I have found out that it shows as non concessional till you do your tax return claiming the deduction. Was stressing but fingers crossed it will be right. Thanks for the video.
You will need to submit an intention to claim a tax deduction with your super fund. They should then change it from a non-concessional to concessional. Then you should be able to claim it. Discuss with your accountant.
Well covered. Thanks.
You're welcome!
Great video as always, Chris. I used this strategy to reduce the tax on a large capital gain very effectively.
I have used it too and it is very effective
Glad it was helpful.
These are pre-tax contributions to your superannuation fund, which include employer contributions, salary sacrifice arrangements, and personal contributions for which you claim a tax deduction
Very informative and the case study was excellent and quite similar to my situation, thanks
Glad it was helpful!
If you earn $80,000 how would you have $59,000 available for personal contribution when a cabbage almost costs your entire weekly wage?
Obviously you would still live with your very elderly parents rent free..😂
May have received an inheritance, gift, prize money etc.?
I love how the vid says he just paid $60k into his super, like is was just sitting in his bank acc doing nothing.
🤷♂️
@@jedi77palmer The person is 62. Surely not too hard to imagine they have that plus more saved?
@@silversun119 someone that has peaked their income at $80k and probably less for the majority of their career wouldn't have very much savings at all.
I would be extremely surprised that they would have that much available.
The fact that they are 62 and have less than 500k super also suggests this.
Thanks mate.
No problem!
Government should provide co contributions to be honest until you get to 1 mil. It will save them more in long run
If under 500k super you can also split up to 85% of your current year of super contributions I believe and I’m looking at this now. So in the example provided if the male client had a wide with less super he could have done that too to try and stay under the 500k cap and to bolster his wife’s super.
A lot of retirers investors have been victimised by the government by taking a large chuck of their pension. But those who are on a full pension and their investment goes under FAMILY TRUST FUND which their families will "look after the "investment ".
I am 32 years old and earn 200k and my concessional contributions are maxed from now on from employer. Balance under 500k. However, 4 of the past 5 years are not maxed. Should I max those before they disappear? ~80k.
At this stage, with best estimate forecasting, I’ll be well over the tax free super limit by the time I retire anyway. Is there any real benefit?
Hi Chris great content. Question. Should the amount declared on the Notice of Intent include before tax salary sacrifice contributions and after tax PCC or just PCC? TIA
Just PCC.
This is a good tip for folks with spare cash if they're not forking out every last penny servicing variable rate mortgage payments.
Agreed
Im stick with super salary sacrifice v pay home loan with 13yrs to retire.
Beware these contributions count towards the $250k threshold of division 293 tax.
Great info.
Thanks!
Thank you
You're welcome.
Super guy you are a super genius ............I think I love you in a superannuation kind of way.
Hahaha, the super love is mutual!
Very good and useful video for me
Good to hear!
Hi Chris, you say that you can't access your super until retirement or age 65, but I thought you could access up to 10% with a transition to retirement strategy? I was thinking of topping up my super (I'm 57) then drawing down on it when I hit 60 and still working full time, is that possible? Thanks, enjoy your videos
Yeah, I thought you could access super before 65. Can someone clarify.
Can access at 60, tax free, if you've fulfilled criteria.
preservation age is 60. Can access as long as you’re not doing meaningful work.
60 Amigo.
I've been on my - defined benefit - for the last 4 years. Retired at 54 but still have to pay tax (17.5%) until I'm 60 - July next year. I can't get my voluntary Contribution money (SRP) until (60) July next year also. I'll be re investing that ($350,000) into a pension plan where we can get a fortnightly top up to the two defined benefits we already have coming in. My wife (she's 67) has been withdrawing her (SRP money) out and re investing that into my super to reduce our tax to about $1,800 a year. This guy is on the money and it's well worth doing. The whole 65/67 years old thing only applies to Government pensions and is easily confused. Hope this helps some of you. Go and get some advice, you might be already in your retirement zone.
Hi SuperGuy
Question? if I know my deductibles from my driving job can create a tax return of around $5k each year, would I still reduce my income down to the 21k or would i go higher?
So, if my balance was $450,000 30 June 2023, I can add my “best estimate” of the gap between what I contributed in 2023-24 and the $27,500 annual cap (e.g. $10,000) to the “known amounts” showing in myGov for 2018-19 to 2022-23 (e.g. $50,000) = $60,000 as the total I can claim as a concessional amount via the notice of intent to claim ? And if on $110,000 per year this would be worth doing ?
Yes, you will get back some of the tax you have paid this financial year. I am doing this and should get around $20k back
Hi super guy ,thank you for the video. Have 2 questions . I salary sacrificed over 30 k this year but also contributed after tax contributions to my super . I still have unused concessional contributions I am eligible to use . Q can I claim after tax contributions I paid as unused concessional contributions ?
Q 2 Do I have to complete notice of intent to claim form till the end of June ?
Personal contributions can be claimed as a personal tax deduction if eligible. The notice of intent needs to be completed before you complete your tax return, before any super withdrawals or transfers and before the end of the following FY.
Here's a question for you. Let's say I have income only from fully franked dividends of 40k. If I then put 30k of that into my super as concessional, would that actually mean that I'm making money off the tax man?!?!? Since fully franked dividends of $40k would mean I'm getting a tax refund (since my 19% is less than the corporate tax rate of 30%) and then on top of that I will get the 15% concessional tax refund. Am I missing something here? Essentially what I'm saying is.....I'm paying 11% tax on my fully franked dividends as long as my total income is less than 45k and then on top of that I'm getting a 15% tax refund if I put $30k as a concessional contribution into my super (let's assume we are talking FY25).
Yes except you can’t get a refund on tax you haven’t paid. Meaning you can only claim 11% of the 15% CCT. Loosing 4% on your 30k.
I have a genuine query and request your advice.
If you become a Aus resident in 2022 and start working in the same year, are you still eligible to claim the past 5 years super cap?
Is there any criteria to use a previous years caps apart from the 500k balance?
Thank you. What happens if you exceed $27500 contribution?
It depends, if you have no unused concessional contributions cap, you get taxed at your marginal rate minus the 15% already paid, known as ECC.
Otherwise, it'll be put against the oldest of 5yrs of unused caps and taxed at 15% in your super fund.
That was very interesting and helpful!
Glad to hear!
Thanks SuperGuy - if I withdrew $25k from my Super in the 2019/20 year when I was unemployed and over my preservation age - does that stop me from now using all or part of my unused Concessional Contributions from the last five years?
Great work, very clear. M
It's not clear at all. My eyes are rolling in the back of my head as he's talking through it.
Thank you.
Is taking a housing loan beneficial for increasing concessional contributions to a superannuation fund?
Great video thanks. If my partner is over 55 but I’m not, and our home is jointly owned, could a downsizer contribution still be made into my Super, or just his?
You must be 55 or over to make a downsizer. So only he would be able to.
@@SuperGuyAu many thanks
If you had reached the 500k limit but were eligible to take out a TTR pension, thereby dropping your super balance below the 500k limit by the amount you transfer into a pension fund, can you then avail of this strategy or does the balance of the pension fund count towards the 500k limit?
The pension account counts towards the $500,000
So 1.1million and i cant use concessional amount. Why not..?
You can... just not unused amounts from previous years
Can you do a video on how to practically do it is there a BPAY details to pay your super fund. Assuming the fund is made before 30 June when does the form need to be lodged and acknowledgement received
Get online to you super fund or contact them by phone, they'll direct you to either the BPay reference (or account transfer) to your specific superannuation account.
Super funds suggest choosing the BPay option.
All super funds and advisers tell you to make these funds clear 3-4 days prior to EOFY and notify your super fund with the ATO: NOTICE OF INTENT document (10minutes to complete and submit).
Really easy process and super fund will forward nootification (2-3days later) that the contribution has been processed as CONCESSIONAL and your tax deduction document will reflect the size.
13:22 I'm a bit confused, do you a) actually have to pay your super fund the money from your available cash reserves or b) are you just telling the super fund you want to claim a tax deduction. If b) where does the money come from?
You are physiclly paying, through Bpay transfer, spare funds you have in cash to your Super fund.
Where that (after tax) money comes from such as sale of assets, gifting, distribution from estate, kids bank account (hahaha).... is your own matter.
Put simply, if the above is palatable for someone, they might deposit 1000, get a tax refund of 345 and for that nett of 665, see 850 in their super account. So, for 665 to have 850 in super OR 6,650 to have 8,500 in super or 13,100 to have 17,000 in super is a very tax effective investment decision.
You pay cash into your super and you will get a tax deduction on that. You need to lodge a form with your super fund and then report it in your tax return.
Not many people have a spare 10k or 20k lying around so I would assume the majority of concessional contribution allowances will expire unused which is a shame since it is so tax effective and compounds well over time.
Thanks heaps for the clarification. I'll go down this route tomorrow and hope I can get all the forms sorted by the EOFY.
I beleive this is the ATO page regarding this. www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/personal-super-contributions#Approvedformfornotifyingintenttoclaim
Thanks for the tip Chris, you may have just made us thousands of dollars!!!! You are THE Super Guy!
@@method341
Perfectly correct.
This is, humbly, higher middle income welfare, as those with spare cash are rare..... although there are those high flyers who might accelerate their careers and go from 50-70k salaries to 150k+ within 3-5yrs and take advantage.
I did hear Luke Scott, from Envision, advise taking funds from offset mortgage as another option to consider, if it's right for your situation.
Wouldn’t it be more beneficial to not go below 45k anyway? If you earn above 45k you are taxed at 32.5% hence there you are making a saving of 17.5% vs only 4% for anything between $18200 and $45000?
You can save 17.5% by reducing down to 45k, then 4% by reducing down further. Why not have both?
@@SuperGuyAu if you have a mortgage more beneficial to offset against that. I think it also
depends on your age.
Can I reduce CGT by claiming a PCC .
Yes. Speak with your accountant about how this works.
If I was to contribute to super at the end of the financial year with money from a savings account, would I get a rebate on the tax I’ve already paid on that money?, ie: income tax
Concessional Contributions can be deducted from your Gross Income, thus helping to minimise your Taxable Income.
Unused Carry Forward Concessional Contributions are only applicable IF you have less than $500k TOTAL across all your Super funds. Otherwise you're limited to the yearly Concessional which this year is $27,500.
BUT remember, Concessional Contributions are taxed at 15% going into Super.
So whether it's worth reducing your taxable income depends on what marginal tax rate you are paying. In general, reducing your Taxable Income for those amounts whose marginal tax rate is greater than 15%, means you will save tax. Just remember that once it's in Super you are subject to the Super rules to retrieve it.
Yes
Maybe Im putting to much in?
I suggest speaking with your accountant or financial adviser.
Can I do this to offset capital gains on a property or other asset? E.g. crypto?
Generally, yes. Discuss this with your accountant.
just a Q on balance. I have 2 balances, which one is used? Reported Super balance (the higher one), or total Super Balance (the lower one). Thanks
The higher one is to be used for the purpose of contribution caps calculation
@@liemtran6157 actually I dont think it is. There is reported and total. My total is the lowest and according to my MyGov this is the one that is used.
@@liemtran6157 are you sure?
Can I contribute to my wife's Super through salary sacrifice or otherwise for a tax effective investment for retirement?
You are only able to salary sacrifice into your own super.
My wife has not worked for a while and her super hasn't grown (in fact reduced with fees) and it has disappeared or has been saved somewhere by ATO - where does she find it and can it be unlocked and put back into a Super Fund, so we can contribute funds and grow that amount for her retirement? I assume even if she's not working, we can contribute funds to her Super?
She should be able to find which super fund it was paid to in the superannuation search in MyGov. Yes you can contribute, and if she earns less than $40k you can actually claim a tax offset of up to $540 a year.
log on at My Gov, see if you can see it there
This could help www.ato.gov.au/forms-and-instructions/superannuation-searching-for-lost-superannuation
Im 42 and plan on veing FI by 50. No way im putting money into super and locking myself out of FI for another 15 yrs.
Thanks for watching
It’s all a scam superannuation
Most superannuation funds primarily invest in shares. Ordinary Australians can do the same thing by setting up a brokerage account and buying shares with their spare money.
At retirement age, investors are typically focused on generating passive income. So, they tend to invest in ASX dividend shares, preferably with full franking.
As we've reported, if you invested $5,000 per year in ASX shares from age 20 to 67, you could have a retirement income portfolio of $1.5 million delivering a passive income stream of $100,000.
Hi, what if the employer contributions are more than the annual concessional cap. I had this issue last year and had to pay extra tax because my employer super contributions were over the concessional cap. How does this help me then?
It doesn't, but if you're earning more than 250k, your super would be in a very healthy position compared to the median, thus doesn't need optimisation to help you get ahead.
This is known as Division 293 tax, read more here:
www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/division-293-tax-on-concessional-contributions-by-high-income-earners
If your employer contributions exceed the cap, this video isn’t really for you.
Count your blessings as you are high income earner and probably your investment strategy should not focus on super.
what are the pros and cons of salary sacrifice vs pers concessional payments ?
After you make a s290 intent to claim, it's the same thing really. You get taxed 15% on both (after the claim for personal) and they both count towards your concessional cap
only real differences are salary sacrifice is limited by your salary amounts and salary sacrifice forgoes the amount being given to you, sitting against an offset account for a year and getting a marginally improved interest deduction from a mortgage.
@@dominicmcnamara great points
@@dominicmcnamara I see, so what you are saying is a better strategy would be to leave the money you would for the super and put in offset against a mortgage, until say May that FY and then deposit it into super as a lump sum (obviously before 30Jun)
@@SuperTambo69
yup, salary sacrifice if you're not a great saver
personal contribution from your offset about the 15-20th June, if you're a confident saver.
Key with this, as Chris states, GET IT DONE BEFORE 20TH JUNE to ensure the super fund has received funds & NoI submission, transacted concessional tax and returned notification to you in the financial year.
I did this last week and sent in intent to claim forms to my super company for four past years: 18/19, 19/20, 20/21, 21/22. I didn’t realise that you had to do the current year first, *then* go to the oldest year and work forward. I thought I had read all the relevant info, and I even called my super to find how to lodge the intent to claim for the older years that weren't available on their web form (which was only for current and 22/23) and no one said anything about that. Feeling stressed now and off to find this info on the ato website to confirm. And then I guess I will need to lodge a change form to modify my contribution to 21/22 if it has to be made to 23/24 instead. Gah hopefully the maths will work so I only have to modify one of them!
Did you have to fill out that many forms? Wouldn't you only do one for the full amount and the ATO will work out where to take it from? (as in which years)
@@silversun119 The form makes you specify a year and only has the space for one year per form. I used the ATO form. Their website says to use their form or one provided by your super. My super doesn't have their own form, so directed me to ATO website, but maybe some super companies have their own and allow for multiple years on one form.
You send the form to your super company, so they need you to tell them how much unused cap you have per year. That's info you have to get from ATO by logging into MyGov.
$18,200 is the taxable income limit for zero income tax, yet you said that at $21k taxable income you will generally pay no tax due to "some offset amounts". Exactly what offset amounts are you referring to?
Usually from deductions, such as uniforms, washing, transport I'd you have to carry tools etc. if you can get $3,000 worth of deductions, you're tax free. This is where people will get a investment property to get deductions and banking on the value of the property rising over time.
Most likely the low income tax offset of $700, $21k is a simple rounded amount not the actual amount.
@@Hunty49 Thanks. Might be difficult for PAYG as in the example.
Thanks for asking because that was the only bit I didn't get. Why is $21,000 the target for tax free income and not $18,200? Doesn't seem to make sense.
czcams.com/users/shortsBaJPnkpJxXw
Great video. Maybe it would be possible to make the contribution 60K , the remaining 1K would be in no concessional and hence get the full co-contribution top of $500.00
While earning $80K?
Do you tell your clients how much or just the maximum you can contribute
Our clients at Toro Wealth get highly specific and personalised advice around contribution amounts.
Is our super meant to be 500K?
It doesn't have to be
Just in time for tax time.
I dont understand any of this
Sorry that it wasn't more helpful
Does the intention to claim back form need to be filled in before the EOFY or can it be filled in after?
That's how I understand it so someone please correct if I am wrong.
1) You MUST make the contribution into your super fund before the financial year you intend to claim ends.
2) Fill in a deduction form (most super fund will have the form readily available on their website and the form has a name of "Intention to Claim Deduction" something like that) and send back to your super company, most will accept email. This form can be sent after the financial year ended if you choose to.
3) DO NOT lodge your tax return trying to claim this contribution against your taxation income until you received your superannation company's letter acknowledging they have received your Intention to Claim Deduction form, then you can lodge your tax return and claim that as a deduction.
As long as you complete before you file your tax return.
@@mayhk8622 thanks! This is my understanding too. Will see how I go 🫣😬😅
2:29 Make sense? No, none of this makes sense, sorry.
Sorry I was unable to help.
I understand you are trying to simply the topic, but you're not. It may be that you're over explaining it. But your video is not making it easy to understand.
It’s crystal clear perhaps rewatch it
@@gloriasaliba3395 Like a joke, if its not received the first time, it's not worth telling again.