Claiming deductible contributions correctly

While Taxation Ruling TR 2010/1 Income tax: superannuation contributions (TR 2010/1) covers the mechanics of how to make a personal contribution, difficulty arises when claiming contributions as a tax deduction is done incorrectly.

Regardless of the case, the tax rules are unforgiving if one step of the process is missed because the Commissioner of Taxation has no discretion in allowing the deduction.

Personal deductible contributions

Where members contribute directly and claim a tax deduction in the year the contribution is made, they are considered concessional contributions and taxed in the fund at a rate of 15% p.a.

From July 1 2024, the concessional contributions cap is $30,000 for all individuals regardless of age. Note: At this stage an increase in contribution caps is not expected on 1 July 2025.

Other mandatory conditions include:

• the contribution is to a complying fund
• the work test applies to members between the ages of 67 and 75 and stipulates they must be gainfully employed for at least 40 hours in an period of 30 consecutive days during the income year in which the contribution was made
• the deduction cannot create or increase a tax loss.