In 2017, the Australian Securities and Investments Commission (ASIC) detailed legal changes in funding arrangements. Although these changes were phased in to minimise confusion, some companies may find they experience errors when claiming personal super contribution deductions. One time of year where these errors are most likely to occur is during the rush to file an annual tax return. Fortunately, the Pherrus team has anticipated what some of these common errors may be, so you can identify them quickly and file your return correctly.
Are you eligible to claim a personal super contribution deduction?
First, are you sure you’re eligible to claim a personal super contribution deduction? You must only include these calculations in your 2018 tax return if you made super personal contributions before June 2018. Additionally, you must disregard any claims that were made after this period, as they’ll fall into your 2019 return instead.
Did you complete your notice of intent to claim?
If you’re going to make a claim to the Australian Tax Office (ATO) for your personal super contributions, you need to complete a notice of intent to claim. As you may have anticipated, there are deadlines for sending your notice. Either you must do it on the last day of the year you intend to claim for or on the day you send your tax return, but you must choose whichever of these dates is the earliest. There are some caveats, though, so you may want to seek professional advice if you’ve missed the date.
Are you sure you’re claiming the correct super contributions?
It’s not possible to claim for all the personal super contributions you make in a tax year. Instead, you must only claim for the ones you make after tax. In other words, you can’t make claims for the ones that fall into your before-tax income. Some examples of what you can claim for include:
- Superannuation guarantees
- Salary sacrifice
- Reportable employer super contributions
All the above must show on your payment summary in order for you to make the claim. If you’re claiming as an individual, some examples of what you can’t claim for include:
- Your compulsory super guarantee
- Certain salary sacrifice amounts
- Reportable employer super contributions that show on your payment summary
Why is it important to identify these common errors yourself?
Ensuring your personal super contribution deductions claim is correct from the start is important for a few reasons. First, you can make sure your claim is processed in a timely manner. When it comes to balancing your finances for the 2019 financial year, this can make life easier for you and your accountant. Second, lodging incorrect claims can lead to disallowed PSC deductions overall. As such, it makes sound financial sense to get your claims right from the start.
At Pherrus, we can provide you with the tax advice you need to make sure you avoid making mistakes when filing your personal super contributions deductions claim. To learn more, contact us.