Advice on Taxation for Small Businesses in Australia
Especially for smaller enterprises in Australia, the taxation system may be a difficult and bewildering procedure to navigate. Nevertheless, if you have the correct information and assistance, it doesn’t have to be an intimidating undertaking at all.
This blog post will supply you with all of the important information regarding the laws and regulations that pertain to taxes in Australia that you need to know. In addition, we will offer some useful advice on how to make the process run as smoothly and without as much anxiety as is humanly possible.
Are you the proprietor of a small business in Australia? If this is the case, you have a responsibility to educate yourself on the many different tax rules and regulations that pertain to your company. This article will provide some helpful advice on taxation for small enterprises in Australia, and it will be posted on a blog.
We will go over the many categories of taxes for which your company can be responsible, and then we will offer some suggestions for lowering the amount of money that you have to pay in taxes. Continue reading this article if you are curious about the taxes of small enterprises in Australia and if you have an interest in doing so.
If you own a small business in Australia, you have a responsibility to educate yourself on the numerous tax requirements that are pertinent to your situation. This post will provide an outline of the primary taxes that you will face and will offer some advice on how to effectively manage your tax responsibilities. Remember that this is just basic guidelines and that if you need more particular information, you should speak with a professional such as an accountant or a lawyer.
It is imperative for you, as the owner of a small business in Australia, to stay on top of your taxes; otherwise, you could be subject to severe repercussions. This book will walk you through the fundamentals of Australian tax law and provide you with some guidance on how to maintain compliance with the law. Please keep in mind that the material presented here is only meant to serve as a general overview; for detailed assistance, it is strongly recommended that you speak with an accountant or tax specialist.
Did you know that in Australia, if you are self-employed and make a profit from your business, you are required to pay income tax on that profit? Therefore, it is essential for small business owners to have a solid understanding of the tax standards that must be met in order to ensure that their tax return is accurate and free of penalties.
In this post, we’ll present an overview of the taxation system for small businesses in Australia, as well as some advice on how to minimize your tax bill and so reduce the amount of money you have to pay in taxes. Therefore, whether you are just getting started with your business or have been operating it for a while, continue reading for some tips on how to maintain compliance with the taxman!
It is imperative that you stay on top of your taxes if you are the owner of a small business in Australia. Nevertheless, understanding the tax system can be challenging, particularly if you are unfamiliar with it.
In this post, we’ll offer some guidance on taxation for small businesses in Australia, including topics such as the goods and services tax (GST), income tax, and company tax, among other relevant topics. We will also provide you with some guidance on how to maintain compliance with the tax system and ensure that your firm continues to function efficiently.
It is essential to have a good understanding of the tax system and how it applies to you personally. This page offers an overview of the taxation procedure for small enterprises in Australia, including information on income tax, the goods and services tax (GST), and depreciation.
In addition to that, it offers advice on effectively managing your taxes and reducing the amount of responsibility you bear. You have, therefore, arrived to the ideal location if you are seeking recommendations concerning the taxation of small businesses in Australia.
Did you know that as the owner of a small business in Australia, you are required by law to make payments toward your income tax? And that in addition to those taxes, there are a variety of others that, depending on the kind of business you run and where it is located, you might be required to pay?
Don’t worry if you aren’t sure which taxes pertain to your small business or how to go about paying them; this article is here to assist you in any way it can. In this section, we will walk you through the many kinds of taxes that are imposed on Australian small businesses and offer some advice on how to deal with them.
Let’s get started!
Tax on the Growth of Business
Your taxation requirements may shift as the size of your business changes during the growth stage of the business lifecycle, which applies to companies now in this stage of development.
Consider the following scenario: your company is expanding into other states. When this is the case, it is essential to take into account the various ways in which states levy and collect their respective forms of taxation, specifically with regard to the payroll tax, transfer duty, and property tax.
There is also the possibility that once upon a time, your company qualified for a small business tax exemption, but now that it has reached a particular size, it does not and cannot qualify for that exemption.
If you hire one of our highly qualified business attorneys, they will be able to advise you on the taxation implications of expanding your company and, if at all possible, structure your company in such a way that it maintains the ability to access small business taxation concessions for the maximum amount of time possible.
Additionally, a developing business can be subject to additional tax requirements if it expands its operations overseas. In this situation, the obligations of Australian enterprises to account for revenues produced outside need to be taken into consideration.
The regulations of the specific location in which your company chooses to operate might have a significant impact on how taxes are applied to profits earned from overseas. Because of this, a growth in the number of employees may also result in an increase in the amount of PAYG withholding requirements.
If it is no longer possible for you to access the small business program, our highly experienced business lawyers are able to provide you with advice on how to make the most of the tax concessions for which you are still eligible. These concessions include CGT concessions and fringe benefits tax concessions.
Our company’s corporate attorneys are very skilled in assessing the small business tax exclusions that are relevant to corporate taxation. In a nutshell, a company needs to fulfil at least one of the following requirements in order to be qualified for the tax breaks that are offered to small businesses:
To qualify, a business must either (a) have annual sales of less than $2 million, (b) have annual sales of less than $2 million for the current year, or (c) have annual sales of less than $2 million for the previous two (2) years and a projected annual sales of less than $2 million for the current year.
If the small business tax concessions are able to be achieved, they have the potential to give a company tax exemptions pertaining to CGT and retirement, in addition to the fifteen (15) year small business exemptions. In addition, a small corporation that is eligible for rollover relief might obtain a discount on capital gains tax of up to fifty percent on active assets (where you buy a replacement asset).
In addition to these alternatives, the tax concessions that are available to small firms typically include advantageous deductions and depreciation regulations that can be of assistance to small enterprises that are attempting to maximize their profitability.
Taxes are another factor that trustees need to take into account since they could be responsible for making tax payments on the portion of the trust’s net income that has not yet been distributed to a beneficiary who is currently entitled to it or to the trustee on behalf of a beneficiary.
The beneficiaries of a trust are subject to taxation on the trustee’s portion of the trust’s net income, regardless of whether or not the beneficiaries are serving in their capacity as trustees of another trust estate. This taxation obligation falls on the trustee.
The same principle applies to the portions of the net income that are allotted to beneficiaries who are entitled to a share of the income but who are considered “legally incapacitated.” Consider the case of a trust that is designated as a special handicap trust and in which a primary beneficiary is a person who resides in Australia at the end of the income year. In this scenario, the trust’s whole net income would be subject to taxation in its entirety.
If an election has been made for the trustee to be assessed on a capital gain of the trust, then the trustee is also responsible for paying tax on the amount of the capital gain if such gain was realized by the trust.
The tax rate that must be paid can change depending on the kind of trust being used as well as the personal circumstances of the beneficiary.
In addition, it is essential to have an understanding of Employee Share Schemes (abbreviated as ‘ESS’), which provide workers with shares in the company owned by their employer at a price that is lower than the market value (or, alternatively, an option to buy company shares in the future), and which also have tax implications that may be concessional or non-concessional in nature.
An employee has the ability to defer the payment of tax until the point in time when they exercise their share option, with an upward limit to defer tax liability for fifteen (15) years. This is one of the many tax concessions that apply to an employee stock option plan (ESS). Other tax concessions include:
When an employer uses an ESS (which is typically the case for start-ups), there are certain ESS requirements that need to be considered based on when the employee receives their interest in the ESS. These obligations vary depending on the type of ESS that is used.
When possible, we give our customers the advice to take advantage of the tax deductions that are made available to businesses that engage in research and development that is beneficial to Australia.
Imagine that a company does research and development that the government of Australia acknowledges as contributing to the nation’s efforts to improve the economy of Australia. In this scenario, an eligible entity may be eligible to receive either a refundable tax offset in the amount of forty-five percent (45%) for companies that are not controlled by income tax-exempt entities and that have an aggregated annual turnover of fewer than twenty million dollars (USD) or a non-refundable tax offset in the amount of forty percent (40%) for eligible entities.
Your business must meet all of the following criteria in order to be considered an eligible entity: it must be a research and development entity; it must engage in research and development activity; it must register its activities with AusIndustry, and it must have incurred notional deductions of at least $20,000 on eligible activities.
1. R&D tax offset
Companies that have an annual turnover of less than AUD 20 million will be eligible for a refundable R&D tax offset beginning with the income year that begins on July 1, 2021. The tax offset will be calculated at a rate that is 18.5 percent higher than the claimant company’s tax rate (previously, it was a fixed rate of 43.5 percent ).
Companies with a turnover of at least AUD 20 million are eligible for a non-refundable tax offset at a rate equal to the claimant company’s tax rate plus 8.5 percent for R&D expenditure between 0 percent and 2 percent R&D intensity and 16.5 percent for R&D expenditure above 2 percent R&D intensity (previously it was a fixed rate of 38.5 percent); R&D intensity is measured as the company’s R&D expenditure as a proportion of its total expenses for the year
For the portion of an entity’s notional R&D deductions that exceed AUD 150 million in the income year, the rate of the R&D tax offset is reduced to the company tax rate. This reduction applies only if the entity has a company (AUD 100 million for income years commencing before 1 July 2021).
In general, the R&D tax benefit can only be claimed by legitimate research and development activities carried out in Australia. However, research and development activities carried out overseas also qualify under certain conditions, particularly where the activities cannot be carried out in Australia.
There is also the possibility of special grant programs being made available to support businesses in the performance of certain R&D in Australia. These financial aid packages are doled out on a case-by-case basis.
2. Inward investment incentives
Rebates on payroll, stamp, and land taxes may be offered by state governments on an ad hoc basis and for limited periods of time depending on the characteristics of the investment project and its overall scale.
3. Additional incentives
Businesses that meet the criteria for receiving cash grants for export market development expenses can get funding for their efforts to export goods and services sourced in Australia.
During the COVID-19 crisis, qualifying businesses and not-for-profit organizations (NFPs) can apply for the following temporary cash flow support, which will enable them to continue operating their enterprises and ensure that their staff continue to have jobs.
- A pay subsidy from the federal government for apprentices and trainees who work for specific companies that either keep an apprentice or trainee throughout the year 2020 or hire an apprentice between October 5, 2020, and September 30, 2021.
- In general, the wages subsidy for qualified employers was determined to be equal to fifty percent of the apprentice’s or trainee’s wage paid, up to a maximum of seven thousand Australian dollars ($7,000 AUD) per quarter for each qualifying apprentice or trainee.
- Employers who qualify for the JobMaker Hiring Credit can take advantage of it. An additional position, open to qualified workers younger than 35 years old, will be available beginning October 7, 2020, and continuing through October 6, 2021.
- If the employee is eligible and between the ages of 16 and 29, the employer will receive AUD 200 per week, and if the employee is eligible and between the ages of 30 and 35, the employer will receive AUD 100 per week, and this benefit will continue for up to a year after the employee begins working for them. There is a limit of AUD 10,400 per extra new position that can be created with this credit. The last day to submit a claim is the 30th of January 2023.
- During the year 2021, the states and territories that participated in COVID-19 offered a variety of monetary relief and support programs for qualifying firms that were impacted by COVID-19 restrictions. In the case of certain declared program payments received by firms with an aggregated revenue of less than AUD 50 million, concessional income tax treatment was applied.
The Goods and Services Tax, or GST, stands for what exactly?
The goods and services tax, known as the GST, is a comprehensive tax that is levied at a rate of 10 percent on the vast majority of commodities that are sold or consumed in Australia.
When companies sell goods or services, they are required to collect and remit GST to the government, and this revenue is then sent to the Australian Tax Office (ATO) (ATO). After that, the federal government gives this money to the states and territories of the United States so that they can pay for public services and infrastructure. Some examples of this are public schools and hospitals.
On July 1, 2000, the Goods and Services Tax (GST) was implemented, and with it came the replacement of a number of other state and federal taxes, charges, and levies. Consumers, who are the final recipients of the products and services, are ultimately responsible for paying the GST.
1. In what circumstances does the GST apply?
The majority of goods and services offered for sale or used in Australia are subject to a 10 percent goods and services tax (GST).
2. Which kinds of goods and services are excluded from the GST and why?
The majority of essential goods, including groceries, educational programs, and medical, health, and care supplies, are excluded from GST. Talk to your business activity statement (BAS) agent or accountant if you are exporting goods and are confused whether or not you should be charging GST on the sales of those goods.
If both of the following conditions are met at the time of sale of the business:
- Both the buyer and the seller must first agree in writing that the sale will be of continuing concern before the transaction may go place.
- The purchaser receives all that is required to ensure the smooth running of the business going forward.
- The seller will continue to run the company up until the day of the settlement.
- The buyer possesses a valid GST registration number.
- The purchase price has been paid in full.
It is possible that the GST will apply to the sale of a firm even if all of these conditions are not met. Before engaging in a sale transaction, it is in your best interest to consult with your accountant and your attorney in order to obtain advice that is tailored to your particular circumstances.
3. Are exports free from GST?
In principle, exports of products from Australia are exempt from GST, provided that they leave Australia within sixty days of the provider issuing an invoice for the goods or receiving any payment for those items. However, there are several exceptions to this rule.
If the person receiving the service is located outside of Australia, the service provider does not need to charge GST.
If you are unsure whether or not a sale made overseas is exempt from GST, it is in your best interest to discuss the particulars of your situation with either your accountant or the ATO by calling 13 72 26.
Should I Go Ahead And Register My Company For The GST?
You must register for GST if:
- If you run a non-profit organization, your annual revenue is at least $150,000, and if you run a for-profit firm, it is at least $75,000.
- As part of your line of work, you offer taxi travel, which entails transferring customers in exchange for a fare via taxi or limousine.
- You are interested in submitting a claim for gasoline tax credits.
If the yearly income from your company is less than $75,000 (or $150,000 for organizations that are not-for-profit), you are exempt from having to register for GST; however, you are free to do so if you so want.
After you have registered for GST, you will be able to reclaim the GST that you have already paid on the products and services that you have purchased for your company (so long as you have a tax invoice from the supplier).
1. What are the steps to registering for GST?
You can register for the Goods and Services Tax (GST) either online, over the phone by calling 13 28 66, or through a licensed tax or BAS agent. You’ll want an Australian Business Number in order to proceed (ABN). You are required to register for GST within 21 days of your GST turnover reaching the threshold. This threshold is an annual business income of $75,000 or more for standard businesses and $150,000 or more for not-for-profit organizations. If your turnover reaches the threshold, you are required to register for GST.
2. I have now registered for the GST; what should I do next?
If your company is registered for GST, you are required to do the following:
- Make sure to factor in GST when determining the final price for your customers.
- The amount that you can claim back in GST credits is already factored into the price of the goods and services that you purchase for your company.
If you are registered for GST, your customers are obligated to pay you an additional 10% on top of the cost of the goods and services they purchase from you (the GST component). Therefore, if the GST applies to your situation, you should always include the GST in the price that you sell the item for.
Those companies who collect GST are obligated to report the collected amount to the Australian Taxation Office (ATO). It is possible that you will be obliged to send the GST amount to the ATO on a monthly, quarterly, or annual basis depending on the amount of GST that your company generates.
3. How can I make a payment to the ATO for the GST?
The total amount of GST you are required to declare and pay each year is determined by your annual turnover.
- You are obligated to file a monthly GST report and make GST payments if your turnover for GST is more than $20 million. You have the option of submitting reports using either the comprehensive reporting method or the more straightforward BAS reporting approach. (You are required to use the full reporting method if your GST turnover is higher than $10 million.)
- You are only required to file and pay GST once every three months if your annual GST turnover is less than $20 million and the ATO has not asked you to file and pay GST monthly. You have the option of using any one of these three methods of reporting GST if you pay the tax on a quarterly basis: the full reporting method, the streamlined BAS reporting method, or the GST instalments approach.
- You have the option to report and pay GST on a yearly basis if your turnover for GST is less than $75,000 (or less than $150,000 if you are a not-for-profit organization) and you are registered for GST. You are exempt from having to report or pay any GST during the year, but at the end of each fiscal year, you are required to do so using the more straightforward BAS reporting system.
When you have successfully completed your GST registration, the ATO will give you a business activity statement (BAS) for you to fill out. You can report and pay your GST, as well as any pay-as-you-go PAYG instalments and other taxes with the assistance of your BAS.
To avoid incurring penalties, you must submit and pay your BAS on time; if you believe that you will be unable to do so on time, you should get in touch with the ATO as soon as you can by calling 13 72 26.
What’s The Simpler BAS Reporting Method?
Your bookkeeping, as well as the creation of your BAS and its lodging, will be streamlined and simplified as a result of using this method.
- The number of codes used for GST classification has been reduced.
- A single bookkeeping entry can be used to record purchases made with both taxable and non-taxable items subject to GST.
- It is not necessary to break down purchases into their respective capital and non-capital components.
- The installation and automation of accounting software are less complicated.
Your company’s annual GST revenue must be less than $10 million for you to be eligible to use the simplified BAS reporting method to submit your BAS.
What exactly is the method of complete reporting?
If you want to use the full reporting approach, you will need to calculate, report, and pay your GST amounts on a monthly basis. Businesses having a GST turnover of more than $10 million are required to lodge and pay their BAS using this method. This approach necessitates the inclusion of additional, more specific information on your BAS, including the following items:
- Total sales;
- Export sales;
- Other transactions exempt from GST;
- Investing in fixed assets;
- purchases not classified as capital;
- GST on sales;
- purchases subject to GST.
In addition, you are required to disclose these sums on a monthly basis if you are obligated or entitled to pay wine equalisation tax (WET), luxury car tax (LCT), or fuel tax credit (FTC).
What’s The GST Instalments Method?
Using the GST instalments approach enables you to make quarterly payments of your GST obligation while maintaining an annual reporting cycle. It is best to call the ATO directly at 13 72 26 to check if you qualify for this reporting method. If you meet the eligibility requirements, you have the option to use this method of reporting if you choose to do so. If you do not meet the eligibility requirements, you cannot use this reporting method.
When is the deadline for my BAS?
Your BAS statement will include a reminder of the date by which you must have lodged your report and paid your BAS. If you file your return on a monthly basis, the date by which it is due is typically the 21st day of the month that follows the end of the taxable period. If you want to submit your reports every three months, the due dates for each quarter are typical as follows:
- 28 October is the end of the first quarter, which includes July, August, and September;
- The last day of the second quarter (October, November, and December) is February 28;
- 28 April is the end of the third quarter (January, February, and March);
- The end of the Fourth Quarter (April, May, and June) is on July 28.
You can pay for your BAS online, by mail, or in person at any Australia Post outlet. You can lodge your BAS online, by mail, or over the phone (if you have a nil lodgement), and you can pay for it online, by mail, or in person.
Can I Make a Change to the Schedule of My GST Reporting and Payments?
It is possible for you to alter the reporting and payment cycle that you utilize for GST if your circumstances and turnover warrant such an adjustment. If you would want more information on modifying your GST reporting and payment cycle, you may get in touch with the ATO by calling 13 72 26.
After I’ve Submitted My BAS, What Should I Do If I Anticipate Receiving a Refund?
In the event that you are eligible for a refund, the ATO will deposit that sum straight into the account that you have designated. This account must be maintained in the name of your company, business, or trading name, or by a registered tax agent, and it must be located at an Australian branch.
Can I lodge my BAS early?
Your statement of business activities can be prepared in advance if any of the following conditions are met:
- You will be absent from your place of business prior to the conclusion of the reporting period, and during that time, the business will not be doing any transactions.
- You are just going to be in the country for a brief period of time and then you will leave before your BAS is generated.
- Your organization is now undergoing administration of some kind.
- Your company is no longer in operation.
- You are going to be travelling, and as a result, you won’t be able to get your BAS.
Up to six months’ worth of BAS can be prepared in advance, covering either six-monthly activity statements or two quarterly activity statements. You are not eligible to obtain your BAS statement early if you have decided to lodge on a monthly basis despite the fact that you are only obligated to report and pay GST on a quarterly basis.
What exactly is the Luxury Car Tax, sometimes known as the LCT?
The luxury car tax is a tax of 33 percent that is applied to automobiles whose worth (with GST) is greater than a specified level. The value of the vehicle as a whole is not subject to the LCT; rather, only the portion of the vehicle’s worth that is greater than the threshold is taxed. Individuals and companies (car dealerships) that sell or import luxury vehicles are the ones who are responsible for making the payment. On your BAS, you are required to make a declaration of LCT.
The Wine Equalization Tax, abbreviated as WET, is what exactly?
Those that produce wine, import wine into Australia, or sell it via wholesale are responsible for paying a wine equalization tax (WET) that is equivalent to 29 percent of the wholesale value of wine. If you are required to pay WET and you are registered for GST, you must include this information on your BAS.
What Are Fuel Tax Credits?
Businesses that are registered for the goods and services tax (GST) are eligible to make claims for fuel tax credits in the amount of the fuel tax that is already included in the cost of the fuel that is used in the majority of their business activities. As part of your Business Activity Statement (BAS), you may be eligible to claim fuel tax credits for your machinery, plant, equipment, and heavy vehicles.
You can file a claim for a fuel tax credit for any taxable fuel that you purchase, manufacture, or import as long as the fuel is used in your company.
Because the fuel tax rate is altered twice yearly, in February and August, in accordance with the consumer price index, it is theoretically feasible for there to be more than one fuel tax credit rate in effect during any given BAS period.
1. I own a small company and in June I made a one-time payment equal to one year’s worth of rent for the building in which I do business. Even though the majority of the payment will be made the following year, am I able to claim the entire amount on my tax return?
If your annual revenue is less than $50 million, you may be able to deduct some qualified pre-paid expenses in the same year that they were paid for, provided that your turnover is less than $50 million.
Rent, insurance, and membership dues to professional organisations are all examples of prepaid expenses that can be deducted from your taxes in the year that they were paid.
Expenses that are paid for durations of twelve months or less and that have a coverage period that ends in the following income year will be considered eligible for reimbursement.
Your prepaid rent is eligible for a tax deduction provided that the period it covers does not extend beyond a year and that the term will come to a conclusion prior to the end of the next income year. This means that you will be able to deduct the full amount from your taxes for the current year.
2. I am the sole proprietor of my company and would like to know how I might reduce my yearly tax liability…
You would be eligible for a number of concessions for small businesses if your annual revenue was less than fifty million dollars. These concessions include the following:
- income tax concessions;
- excise concessions;
- concessions about the Goods and Services Tax (GST);
- instalment concessions for users of the Pay As You Go (PAYG) system;
- concessions in regard to the Fringe Benefits Tax (FBT).
The requirement of $50 million in annual sales applies to the majority of concessions, with the following exceptions:
- small business payroll must not exceed $5 million to qualify for the small business income tax offset;
- The minimum annual turnover required to qualify for the capital gains tax (CGT) discounts is $2 million.
3. I would like to add some additional funds to my existing superannuation account. Are there restrictions on how much can be contributed to a superannuation plan?
You are only allowed to make voluntary contributions of up to a certain amount of money to your super fund on a concessional basis. This limit is set by the government. This is due to the fact that there are caps on the amount of money that can be contributed to superannuation each year.
If you make contributions that are in excess of the restrictions, you will be required to pay additional taxes, and any excess concessional contributions will be counted toward the maximum for non-concessional contributions.
Contributions that are deemed to be eligible for a tax deduction are referred to as concessional contributions. These contributions can be made by employers as well as by self-employed individuals in the form of personal contributions.
The annual limit for concessional payments is currently set at $27,500, regardless of the contributor’s age.
In most circumstances, you will be required to pass a work test in order to be eligible to make contributions to your retirement fund if you are older than 67. To be eligible to make tax-deductible and nondeductible contributions to your superannuation during this fiscal year, you need to have worked for a minimum of 40 hours per week for a period of at least 30 consecutive days.
Donations made from money that has already been taxed are known as non-concessional contributions. When money is put into a retirement savings account, the contributions are not subject to taxation in any way. However, once earnings are in the fund, they are subject to taxation at the standard fund rates.
The maximum amount that can be contributed through non-concessional accounts is $110,000. As a consequence of this, under the “bring forward rule,” an amount equal to $330,000 may be donated within the predetermined time period of three years.
If you have a total balance in your superannuation account that is close to $1.6 million, the only years for which you are eligible to use the bring-forward rule are the number of years that would bring your balance to $1.6 million.
If you have already triggered the bring-forward rule and your account balance has reached $1.7 million, you will be unable to make any additional non-concessional contributions. This is the case even if you have not yet effectively used up the entirety of the bring-forward cap that has been triggered.
If you triggered the bring-forward rule before 2016/17 but did not contribute the entire $540,000, you will be limited to a transitional bring-forward cap. This cap will be in effect until 2017/18.
Even if you satisfy the requirements of the work test, you will not be able to take advantage of the “bring forward” provision if you are older than 65.
4. I make additional payments into my superannuation fund each month. Do I have the right to deduct this from my taxes?
You are now eligible to contribute to your retirement fund and receive a tax deduction for doing so, even if your employer is obligated to contribute to your retirement fund.
Before the 1st of July 2017, in order to qualify for a tax deduction for personal contributions, you were required to be self-employed.
Along with any contributions that your employer makes, any contributions that you claim as a tax deduction are included in the total amount that goes toward the $27,500 ceiling on concessional contributions. If this limit is exceeded, you may be responsible for additional tax payments.
Nevertheless, beginning with the year 2019, if you have not contributed the maximum allowable amount under the concessional contributions cap for the year, the surplus can be carried forward and used in a year after that (within five years).
If you make a contribution and then claim a tax deduction for that contribution, you will not be eligible for the super co-contribution for the amount that you claim as a tax deduction.
BEFORE you can make a claim for the tax deduction, you are required to obtain an acceptance from your super fund confirming that a valid notice of intent has been received.
You are not required to lodge a claim for a tax deduction if you make a personal contribution to your retirement fund (super). It will be considered a non-concessional contribution, therefore the fund itself will not be subject to taxation on it. If you do not claim a tax deduction for a certain amount, you can be entitled to a co-contribution instead.
5. I came into some money by inheritance. Should I expect to pay taxes on my inheritance?
Unless the executor specifically tells you that some portion of the bequest is taxable, the inheritance itself is not taxable. However, if you invest the income from the estate, any gains that result from those investments will be subject to taxation.