Is it because I have reached retirement age of 67? The payment into Super is in accumulation phase. It is a non-concessional contribution. Or my income increased as sold a house and the Super contribution offsets that?
Hi @SeedLady,
If the $120,000 contribution was made as a non-concessional contribution, it wouldn't usually reduce your taxable income on its own.
Based on the info you've provided, it may be worth checking whether a deduction has been claimed for some or all of the contribution. Personal super contributions can reduce your taxable income where a valid notice of intent to claim a deduction has been lodged with the super fund.
Is there a tax question in there somewhere?
Some clarification of what that may be would be useful.
Yes, there is a tax question! When I entered relevant details into my online tax system including the Capital Gains etc from sale of house, included was the super amount of $120K but that was deducted from my income thereby reducing the amount of tax payable. Was not expecting a deduction. Why is it so? Checked the Division 293 but income falls below that.
Maybe I answered the question myself. :)
People can claim a tax deduction for concessional super contributions. Unusual for it to be as high as $120k though, BUT not impossible, but you can't claim a tax deduction for it unless you have lodged a notice of intent to claim a tax deduction before you lodge your tax return.
So
1) don't lodge your tax return yet.
2) log into your myGov acct, go to ATO services and under super - look at your concessional contributions and carry forward concessional contributions amounts.
3) If you have up to $120k AND you want to claim the tax deduction for the full $120k, fill out a notice of intent to claim a tax deduction, but speak to your super fund or tax advisor first to make sure it's right for you.
4) if you have a lower cap leftover from
this year and the last 5 years (info in myGov) and want the tax deduction - fill out the NOI for the amount you want to claim
5) bear in mind any super contributions treated as concessional will have 15% tax taken out in the super fund - but as long as you save more than that in tax outside the super fund, you should be better off.
6) check your super account to see how they treated the $120k you contributed - I assume you actually meant it to be a non-concessional contribution (no tax taken out when you put it into super) but it might work in your favour to treat some of it as concessional. BUT any that isn't to be treated as concessional you need to tell your super Fund not to take 15% out of (ie direct them to treat it as non-concessional).
short version - can be a benefit to you to claim a tax deduction but speak to a professional about how and make sure they aren't treating the whole $120k as concessional unless you have that much cap left.
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