Government super co-contribution

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Hi All,

I would like to make a contribution to my super to get the government co-contribution. I would like to know how is property income calculated.

The government uses your TOTAL INCOME to work out how much co-contribution to pay. Does this total income include rent you recieve from your IP or does total income include the net loss or gain from the property?

http://www.ato.gov.au/individuals/content.asp?doc=/Content/42616.htm&page=10#P220_19286

It does state that total income is BEFORE deductions, does this include IP deductions?

 

[yo yo ma]

If you don't get an answer here, phone the information line and they will be able to tell you. I had a query and they were really helpful. A timely reminder also, that the payment must be made before June 30 to be eligible for the co-contribution this year.

 

[crc_error]

I did call and they said only the rent is counted.. but I think the operator got it wrong, as if you read the website, business income is counted after deductions. I can't remember as my accountant does my return, but I believe property rental income/costs are placed in the supplementary tax pack, and then the net figurer from the supplement pack is counted in the total income field in the main tax pack.

 

[LynnH]

A timely reminder also, that the payment must be made before June 30 to be eligible for the co-contribution this year.

A little info to add to yo yo ma's reminder: The payment must actually go into your superannuation account on or before 30th June for you to be eligible for the co-contribution. Posting your cheque (or whatever) on 30th June is not sufficient.

Cheers
LynnH

 

[Buddybee]

...and after you work out what you want to deposit, don't forget that you'll be paying the 15% tax BEFORE the government co-contributes, so take that into account (unlike my hubby last year )

Cheers
Buddybee

 

[crc_error]

...and after you work out what you want to deposit, don't forget that you'll be paying the 15% tax BEFORE the government co-contributes, so take that into account (unlike my hubby last year )

Cheers
Buddybee

you only pay tax on salery sacrifice contributions, or if you run a business, your deductable contributions. un-deductable contributions will not trigger a tax event.

 

[poppy]

I've been wondering the same thing RE the co-contribution. Looks like as of next financial year they will add back all the losses from the IPs to determine the total income, but for this year, I'm not sure. If you find out anything definite, please let us know.

 

[The Y-man]

I did call and they said only the rent is counted.. but I think the operator got it wrong, as if you read the website, business income is counted after deductions. I can't remember as my accountant does my return, but I believe property rental income/costs are placed in the supplementary tax pack, and then the net figurer from the supplement pack is counted in the total income field in the main tax pack.

I know that for a lot of government related things (eg pensions, allowances), the gross income that is counted (i.e. rent is counted but interest on loans is not), so it would not surprise me.

Cheers,

The Y-man

 

[nonrecourse]

Kids qualify as well

Most people are unaware of this but if you have an SMSF and your teenage children work more than 40 hours in any month you can put $1000 in super in your fund and claim the maximum $1500 co contribution for them. If you operate a business and employ them you can claim their wages as a deduction for the business as well. They do not have to be 18. If they are 18 you need to ensure they are appointed as directors in your super fund and have signed off on reading and understanding their responsibilities as a director.

 

[Buddybee]

you only pay tax on salery sacrifice contributions, or if you run a business, your deductable contributions. un-deductable contributions will not trigger a tax event.

Your right, that was his problem - he tried to Salary Sacrifice to gain the Co contribution, then realised it needed to be after tax.

Cheers
Buddybee

 

[alba]

Anyone can point me in the direction where I can find a user friendly resource on how super works and what are the various scenarios and pitfalls? I did try the ATO but I only found what is intended for the accountants and it's so complicated. Thanks.