This brings tax deductions into the current financial year that would have otherwise been in excess of the ordinary annual concessional contribution cap.
Concessional contributions often include employer, salary-sacrificed or personal contributions claimed as tax deductions. The combined total of these contributions counts towards your concessional contribution cap.
The 2022 financial year concessional contribution cap is $27,500, an increase from the previous financial year’s $25,000.
The rules allow to calculate any “unused” portions of concessional contributions from 01st July 2018 to and then “carry forward” unused portion to claim in a later financial year.
The caveats for this this catch up is that can only be done if your total super balance is less than $500,000 as at 30 June in the financial year before the year when you make catch-up contributions. Also unused concessional cap amounts can only be carried forward for a maximum of five years.
Your usual income may mean there’s no real tax advantage in making super contributions, but if you sell a large capital asset like shares or a rental property, you could have a significant capital gain. You could then make a catch-up super contribution to reduce your taxable income in the year of that sale.
26th-September-2022 | 