max out your super before June 30 with this to-do list

In an SMSF, if you make personal contributions through online banking, make sure the money actually appears in the fund’s bank account by June 30. Although online transfers often seem immediate, this does not always translate into an immediate addition to the bank account. recipient bank account (of SMSF).

If you are very late, it is better to pay the dues by check. A contribution made by check is considered received as long as it is in the hands of the SMSF Trustee before midnight June 30 and there was sufficient money in your personal account to cover it. It needs to be banked quickly, but that’s pretty much the only time a contribution showing on your fund’s July (not June) bank statement will count as a 2021-22 contribution.

You don’t have the same flexibility with a personal contribution to a public fund. Many have deadlines well before June 30 – sometimes a week or more. Make sure you are aware of these dates before assuming that a last minute deposit will be acceptable.

It can be even trickier if your last-minute contribution will come from an employer. Nowadays, it is practically impossible for an employer to make them by check.

Many employers also pay their super dues using what is called a “clearing house”. They give the super of all their employees to one clearing house, and then it is the clearing house that distributes the money correctly among the various pension funds. This means that there is a delay between when the employer makes the payment and when it lands in your super fund bank account. If this delay causes you to enter the new fiscal year, the contribution will not be paid on time.

Making sure your contributions count in 2021-22 can be important for many reasons. Your contribution limits or caps work on a fiscal year basis. So if you have planned your affairs carefully so that you reach, say, the concessional contribution limit (contributions made by an employer or those you make personally but claim a tax deduction) of $27,500 in 2021-22, you need all these contributions to arrive in your fund before June 30th.

Family trust distributions

Will you (or a family member) receive money from a family trust (called distributions) that will be counted on your 2021-2022 tax return? If so, are you considering making a super contribution and claiming a tax deduction to reduce the tax you pay on these distributions? This contribution must be paid before June 30, even if you do not yet know the exact amount of the distribution. The same applies if you make a contribution that you intend to claim as a tax deduction for any other reason – make sure it lands in the super fund before the end of the year.

Co-contributions

Do you have family who could benefit from government co-contributions? This is the plan where some people can make personal super contributions and get an extra 50% from the government ($500). In other words, someone who meets all the eligibility rules can contribute $1,000 of their own money and the government will add another $500. To lock in this benefit for 2021-22, the personal contribution must be in the super fund by June 30.

SMSF Costs

Are there any fees that you personally paid for your SMSF that should have been paid by the SMSF? If you don’t get them reimbursed, they are treated as a contribution.

For example, Jim has insurance in his SMSF and paid the premium ($3,000) via his personal credit card in June. If he does not get his fund to pay it back, the SMSF tax return will need to show that it is an expense incurred by the fund but paid by Jim, and in doing so he has effectively made a contribution of $3,000 for himself. If he has already exhausted his contribution limits, this will potentially cause him big problems.

Technically, June 30 isn’t magic here – Jim just has to make sure he gets his money back “quickly”. But in practice, it’s actually much easier to make sure everything is done in the same fiscal year. Then do it also before June 30th.

Plan ahead

June is also the time to think ahead for the next fiscal year. Many super rules depend on how many supers you already have.

For example, most people can make up to $110,000 per year in personal contribution (with no tax deduction claimed). Some can even make contributions over several years at a time and contribute up to $330,000. But anyone with $1.7 million or more in super as of June 30, 2022 has a $0 cap on those contributions.

What if you could see that your super balance will be slightly greater than $1.7 million as of June 30, 2022, but would still like to add to your super in 2022-23?

If you’re already eligible to withdraw money (for example, you’re over 65 or meet the definition of “retirement” in the super rules), it might even be worth making a small withdrawal in the coming weeks. to scratch just below this threshold. Then, in the new exercise, you can put that and more back into super.