June 30 is rapidly approaching, which means it is time to look at your affairs to optimise your personal finances.
The best tax saver is superannuation and in the next few weeks we will discuss the various strategies available.
A simple and useful one is to make a spouse contribution of $3,000 so you can become eligible for the tax offset - it is the best way I know to get a capital guaranteed 18% on your money.
The amount of the offset is 18% of the lesser of $3,000 or the amount of the spouse contribution actually made, so a contribution of $3,000 would give you an immediate tax offset of $540 which would reduce your own tax.
Once a spouse's income exceeds $10,800 the offset tapers - no offset is payable once spouse income exceeds $13,800.
If the spouse is under 65 their employment status is not relevant but if they are aged between 65 and 70 the spouse must be eligible to pass the work test which involves working 40 hours in 30 consecutive days. Both the contributor and the spouse must be Australian residents for tax purposes at the time the contribution is made.
The age of the contributing spouse is not relevant nor do they need to be employed. However, they cannot claim the contribution as a tax deduction.
As always, take advice and keep in mind that the contribution must be received by the fund before June 30th to be eligible.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: firstname.lastname@example.org.
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