The Australian share market was subdued in May, with the All Ordinaries index closing the month 0.9% higher at 6,123.50 points. The Australian Dollar was also flat, with 1 Australian dollar currently buying 75.64 US cents.
The Reserve Bank of Australia (RBA) board kept the official Cash Rate on hold at 1.50% per annum. The RBA board will meet again next Tuesday, with rates once again expected to remain on hold.
In the month of May, the United States Dow Jones index gained by 1.0%, the London FTSE gained by 2.2%, the Japan Nikkei 225 fell by 1.2% and the Hong Kong Hang Seng Index fell by 1.1%.
With the end of financial year here, I have discused below are some common strategies you could consider to help your superannuation work harder for you....
Tax-deductible superannuation contributions
You may be eligible to claim a tax deduction for your personal super contributions. By doing this, you may be able to pay less tax while saving more for your future.
Your eligibility can be affected by your age, sources of income and the level of salary sacrifice and certain other employer contributions made for you. To claim a deduction, you must give a notice to the Trustee of your super fund and have it acknowledged.
Keep in mind that personal deductible contributions count towards your annual before-tax contributions cap. The current before-tax contributions cap is $25,000 per financial year. Any contributions made above these limits will attract additional tax.
In the 2017/18 financial year, if you are a middle to low income earner, adding to your superannuation from after-tax money could see you entitled to a government co- contribution worth up to $500.
To be eligible you need to earn less than $51,813 in the 2017/18 financial year and be aged below 71 at 30 June 2018. You must also have a total superannuation balance of less than $1.6 million at the start of the financial year to be eligible.
The maximum co-contribution of $500 is available if you earn less than $36,813 in the 2017/18 financial year and if you have made a contribution yourself of at least $1,000. The co-contribution steadily reduces as your income rises and until it reaches zero at an annual income of $51,813.
Spouse superannuation contribution tax offset
If your spouse or partner's assessable income is less than $40,000 in a financial year, and you decide to make superannuation contributions on behalf of your spouse, you may be able to claim a tax offset for yourself.
The maximum tax offset available is up to $540 if your spouse receives $37,000 or less in assessable income in the 2017/18 financial year. The tax offset is progressively reduced until it reaches zero for spouses who earn $40,000 or more in assessable income in a year.
For more information, or to discuss your eligibltiy for any of the above strategies, please contact Ryan Love on 1300 856 338.
This article is general information only and is not intended to be a recommendation. We strongly recommend you seek advice from your financial adviser as to whether this information is appropriate to your needs, financial situation and investment objectives.