It is imperative for all members/ trustees to understand the concessional and non-concession contribution caps for an income year.
Concessional Contribution Cap
Concessional contributions include employer contribution and personal contributions claimed as a tax deduction by a self employed person.
For the 2013-14 income year the amount of concessional cap is $25,000.
For individuals aged 59 and over at 30 June 2013 and 49 and over on 30 June 2014, the concessional cap has been temporally increased to $35,000.
Non-Concessional Contribution Cap
Non-concessional contributions include contributions from after tax income. These include:
- Personal contributions that have not been claimed as a deduction
- Spouse contributions
- Contributions which exceeded your before-tax cap
The non-concessional cap for 2013-14 is $150,000.
It is extremely important not to exceed the concessional and non-concession cap and avoid paying extra tax at your marginal tax rate.
If you have a question in regards to contribution caps in your SMSF, please give Redwood Advisory a call on 1300 790 110.
Ivan Filipovic – Director Redwood Advisory- SMSF Specialists.
The content has been prepared without taking account of the objectives, financial situation or needs of a particular individual and does not constitute financial product advice.