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Shane Gold

Compliance Officer at First State Super

Member Since December 2012

NSW, 2001

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Superannuation

Shane Gold answered this question

Phil Joel
Phil Joel, Director at SavvySME

Asked this question - Finance and Accounting

How to reduce taxable income with superannuation contribution?

Phil,



The concessional contribution cap for 2013 financial year is $25K. From 1/7/2013, this cap increases to $35K for people over 60 and from 1/7/2014 for people over 50. From 1/7/2018, everyone will be able to contribute $35K regardless of age.



From 1/7/2013, the compulsory SG is 9.25%. Based on the example and assuming you’re under 60, you can put in $25K where the amount above the 9.25% SG will be treated as salary sacrifice which is  arranged between the employer and employee. The total $25K will be taxed at 15% and the reduced income of $35K will be taxed at the individual’s marginal tax rate.



There is no adverse impact on the employer for allowing employees to salary sacrifice that I am aware off. In fact, the employer may be able to claim a tax deduction on the SG and salary sacrificed contributions. 



Cheers Shane


Shane Gold answered this question

Ananda Raj Pandey
Ananda Raj Pandey, Developer at

Asked this question - Taxation

Does anyone have any tips on how I can save on tax?


Agree the question is too broad, however, in
terms of savings for retirement, there are various tax benefits in
superannuation available to us, depends our circumstances. Without knowing your
circumstances, it is not possible to say whether or not you’re eligible or
entitled to these benefits. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />



The following information is of a general nature
and doesn’t constitute financial advice. Before you act on it, you should seek
advice from appropriately qualified professionals.



Here are some tax incentives available in superannuation:



1.    
Low Income Superannuation Contribution: Superannuation guarantee (SG)
contributions are taxed at 15% (contributions tax). If you’re an employee
receiving SG contributions from your employer and your income is less than $37Kpa,
you’ll receive a tax rebate of up to $500 from the ATO paid to your
superannuation fund. This is basically a refund of the 15% contributions tax.     



2.    
Spouse contribution: If your spouse is working and earning
less than $13,800pa, you can make a spouse contribution on his/ her behalf, you’ll
be entitled to receive a tax rebate of up to $540 from the ATO. For example, if
your spouse earns say $10Kpa and you make $3K spouse contribution, you’ll be eligible
to claim 18% of the $3K as a rebate, giving you $540 tax benefit.



3.    
Co-contribution: If you’re earning less than $61,920pa and make personal
contributions to superannuation, you may be eligible to receive a
co-contribution from the ATO of up to $500pa. If you earn less than $46,920,
every $1 you put in superannuation the ATO will give you $0.50, up to the maximum
of $500 a year. If your income falls between $46,920 and $61,920, you’ll
receive the co-contribution at a sliding scale. For example, if your income is
$45K and you put $1000 personal contribution to superannuation, the ATO will
also put $500 to your superannuation fund for you.



4.    
Tax deduction: Self-employed or substantially self-employed people may
be able to claim a tax deduction on personal contributions to superannuation.
Tax deduction reduces your taxable income; therefore reduces the amount of tax
you have to pay.              



5.    
Salary sacrifice: If you’re a high income earner you may be able to salary
sacrifice to superannuation and pay less tax. Let’s say you’re on the top
marginal tax rate, you can salary sacrifice up to $25K to superannuation and
only get taxed at 15% on this amount instead of 46.5% if you receive the amount
as an income.



6.    
Contributions splitting: If you’re planning to retire between 55-59,
you can withdraw your superannuation as a lump sum up to the tax-free threshold
without having to pay tax. The threshold for the 2013 financial year is $175K. Assuming
one spouse has a larger super balance than the other (eg one is over the
threshold and one is under), you may be able to take advantage of the two
tax-free thresholds by doing a contribution splitting. How it works is each
year, if you’re eligible, the spouse with the high account balance can transfer
85% of the concessional contributions (includes SG and salary sacrifice) to the
spouse with the lower account balance. This process can be done each year. The
idea is to increase one account balance and lower the other in order to take
advantage of two tax-free thresholds.    



7.    
Tax free on lump sum withdrawal: Under current legislation, you can receive
your superannuation tax-free once you turn 60. If you’re not too desperate for
money, try to wait until you’re 60. But in some circumstances you may not have
to pay tax at all even if you’re between 55-59 – see point 6 above.



8.    
Taking superannuation as an income stream
(pension):
One of the benefits of taking your superannuation as an income stream is that
you do not have to pay tax on any investment earnings. Whereas earnings in your
superannuation account are taxed at 15%.              



Remember, these incentives are only applied
to superannuation. As superannuation is a long-term savings for retirement, most
of the benefits you receive now are not available until you retire or until you
meet one of the conditions of release that allows you to take your super.



As both sides of politics are campaigning
to win votes, there have been talks of abolishing some of these incentives in
order to fund their promises.



Once again, if you’re considering whether
any of these incentives are appropriate for you, you should seek advice from a
qualified accountant or financial planner.




Shane Gold answered this question

Michelle Wearing-Smith

Asked this question - Online Business

What are the top 3 ways (or places) to sell an online business?

You can be an internet marketer and sell digital products online. People around the world are looking for information to help them accomplish certain tasks or solve certain problems so products such as eBooks, software and mobile applications are very popular.



You can write an eBook in areas that you're good at to sell. If you don't have a product of your own, you can become an affiliate and sell other people's products. www.clickbank.com has thousands of products you can promote and if you make a sale, you will receive commission up to 75%.



While Clickbank is a place for digital products, you can also become an affiliate and sell physical products on Amazon. 



Another way you can make money online is by blogging. You can blog about whatever you're good at and once you have followers, promote related products on your blog them. You can also monetise it with Google Adsense.


Shane Gold answered this question

Wendy Huang
Wendy Huang, Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes

Asked this question - Business Management

Shane Gold answered this question

Jeffrey Joel
Jeffrey Joel, MD at Auspac Trading NSW PL

Asked this question - Superannuation

What is the maximum amount one can contribute to super?

For the 2012/13 financial year, you can contribute up to $25,000 of concessional contributions. This includes SG and salary sacrifice.


For a non-concesional contribution (personal), you can put in $150,000pa or you can use the bring forward provision which allows you to make $450,000 over a 3 year period.


These amounts are the contributions caps. If you exceed these caps, you will pay a total of 46.5% contributions tax. You just pay more tax for the excess amount which is at the highest marginal tax rate.


A new law has been introduced that if you exceed the concessional contributions cap by less than $10,000, you'll be given the opportunity by the ATO to have the amount withdrawn from your super and pay you as an income and be taxed at your marginal tax rate. You can only use this new rule once in your lifetime. If you breach the cap and whether or not you accept the offer from the ATO to have the excess amount paid to you as an income, you'll not receive another chance should you breach the cap again.


Shane Gold answered this question

Phil Joel
Phil Joel, Director at SavvySME

Asked this question - Web Hosting

What should I look for in a Web hosting partner?

A good support is key, however, another thing to consider is whether or not you're creating multiple websites or just a single one. If you want to host more than one website than you would want to choose a company that offers addon domains. This allows you to host multiple websites under one account. I have yet to come across a webhosting company in Australia that provides an addon domain.


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Shane Gold answered this question

Phil Joel
Phil Joel, Director at SavvySME

Asked this question - Finance and Accounting

How to reduce taxable income with superannuation contribution?

Phil,



The concessional contribution cap for 2013 financial year is $25K. From 1/7/2013, this cap increases to $35K for people over 60 and from 1/7/2014 for people over 50. From 1/7/2018, everyone will be able to contribute $35K regardless of age.



From 1/7/2013, the compulsory SG is 9.25%. Based on the example and assuming you’re under 60, you can put in $25K where the amount above the 9.25% SG will be treated as salary sacrifice which is  arranged between the employer and employee. The total $25K will be taxed at 15% and the reduced income of $35K will be taxed at the individual’s marginal tax rate.



There is no adverse impact on the employer for allowing employees to salary sacrifice that I am aware off. In fact, the employer may be able to claim a tax deduction on the SG and salary sacrificed contributions. 



Cheers Shane


Shane Gold answered this question

Ananda Raj Pandey
Ananda Raj Pandey, Developer at

Asked this question - Taxation

Does anyone have any tips on how I can save on tax?


Agree the question is too broad, however, in
terms of savings for retirement, there are various tax benefits in
superannuation available to us, depends our circumstances. Without knowing your
circumstances, it is not possible to say whether or not you’re eligible or
entitled to these benefits. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />



The following information is of a general nature
and doesn’t constitute financial advice. Before you act on it, you should seek
advice from appropriately qualified professionals.



Here are some tax incentives available in superannuation:



1.    
Low Income Superannuation Contribution: Superannuation guarantee (SG)
contributions are taxed at 15% (contributions tax). If you’re an employee
receiving SG contributions from your employer and your income is less than $37Kpa,
you’ll receive a tax rebate of up to $500 from the ATO paid to your
superannuation fund. This is basically a refund of the 15% contributions tax.     



2.    
Spouse contribution: If your spouse is working and earning
less than $13,800pa, you can make a spouse contribution on his/ her behalf, you’ll
be entitled to receive a tax rebate of up to $540 from the ATO. For example, if
your spouse earns say $10Kpa and you make $3K spouse contribution, you’ll be eligible
to claim 18% of the $3K as a rebate, giving you $540 tax benefit.



3.    
Co-contribution: If you’re earning less than $61,920pa and make personal
contributions to superannuation, you may be eligible to receive a
co-contribution from the ATO of up to $500pa. If you earn less than $46,920,
every $1 you put in superannuation the ATO will give you $0.50, up to the maximum
of $500 a year. If your income falls between $46,920 and $61,920, you’ll
receive the co-contribution at a sliding scale. For example, if your income is
$45K and you put $1000 personal contribution to superannuation, the ATO will
also put $500 to your superannuation fund for you.



4.    
Tax deduction: Self-employed or substantially self-employed people may
be able to claim a tax deduction on personal contributions to superannuation.
Tax deduction reduces your taxable income; therefore reduces the amount of tax
you have to pay.              



5.    
Salary sacrifice: If you’re a high income earner you may be able to salary
sacrifice to superannuation and pay less tax. Let’s say you’re on the top
marginal tax rate, you can salary sacrifice up to $25K to superannuation and
only get taxed at 15% on this amount instead of 46.5% if you receive the amount
as an income.



6.    
Contributions splitting: If you’re planning to retire between 55-59,
you can withdraw your superannuation as a lump sum up to the tax-free threshold
without having to pay tax. The threshold for the 2013 financial year is $175K. Assuming
one spouse has a larger super balance than the other (eg one is over the
threshold and one is under), you may be able to take advantage of the two
tax-free thresholds by doing a contribution splitting. How it works is each
year, if you’re eligible, the spouse with the high account balance can transfer
85% of the concessional contributions (includes SG and salary sacrifice) to the
spouse with the lower account balance. This process can be done each year. The
idea is to increase one account balance and lower the other in order to take
advantage of two tax-free thresholds.    



7.    
Tax free on lump sum withdrawal: Under current legislation, you can receive
your superannuation tax-free once you turn 60. If you’re not too desperate for
money, try to wait until you’re 60. But in some circumstances you may not have
to pay tax at all even if you’re between 55-59 – see point 6 above.



8.    
Taking superannuation as an income stream
(pension):
One of the benefits of taking your superannuation as an income stream is that
you do not have to pay tax on any investment earnings. Whereas earnings in your
superannuation account are taxed at 15%.              



Remember, these incentives are only applied
to superannuation. As superannuation is a long-term savings for retirement, most
of the benefits you receive now are not available until you retire or until you
meet one of the conditions of release that allows you to take your super.



As both sides of politics are campaigning
to win votes, there have been talks of abolishing some of these incentives in
order to fund their promises.



Once again, if you’re considering whether
any of these incentives are appropriate for you, you should seek advice from a
qualified accountant or financial planner.




Shane Gold answered this question

Michelle Wearing-Smith

Asked this question - Online Business

What are the top 3 ways (or places) to sell an online business?

You can be an internet marketer and sell digital products online. People around the world are looking for information to help them accomplish certain tasks or solve certain problems so products such as eBooks, software and mobile applications are very popular.



You can write an eBook in areas that you're good at to sell. If you don't have a product of your own, you can become an affiliate and sell other people's products. www.clickbank.com has thousands of products you can promote and if you make a sale, you will receive commission up to 75%.



While Clickbank is a place for digital products, you can also become an affiliate and sell physical products on Amazon. 



Another way you can make money online is by blogging. You can blog about whatever you're good at and once you have followers, promote related products on your blog them. You can also monetise it with Google Adsense.


Shane Gold answered this question

Wendy Huang
Wendy Huang, Full Time Blogger and YouTuber at A Custom Blog in 4 Minutes

Asked this question - Business Management

Shane Gold answered this question

Jeffrey Joel
Jeffrey Joel, MD at Auspac Trading NSW PL

Asked this question - Superannuation

What is the maximum amount one can contribute to super?

For the 2012/13 financial year, you can contribute up to $25,000 of concessional contributions. This includes SG and salary sacrifice.


For a non-concesional contribution (personal), you can put in $150,000pa or you can use the bring forward provision which allows you to make $450,000 over a 3 year period.


These amounts are the contributions caps. If you exceed these caps, you will pay a total of 46.5% contributions tax. You just pay more tax for the excess amount which is at the highest marginal tax rate.


A new law has been introduced that if you exceed the concessional contributions cap by less than $10,000, you'll be given the opportunity by the ATO to have the amount withdrawn from your super and pay you as an income and be taxed at your marginal tax rate. You can only use this new rule once in your lifetime. If you breach the cap and whether or not you accept the offer from the ATO to have the excess amount paid to you as an income, you'll not receive another chance should you breach the cap again.


Shane Gold answered this question

Phil Joel
Phil Joel, Director at SavvySME

Asked this question - Web Hosting

What should I look for in a Web hosting partner?

A good support is key, however, another thing to consider is whether or not you're creating multiple websites or just a single one. If you want to host more than one website than you would want to choose a company that offers addon domains. This allows you to host multiple websites under one account. I have yet to come across a webhosting company in Australia that provides an addon domain.


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