You may have heard about a little-known strategy that allows a person to contribute up to $3,000 to their spouse’s super and receive $540 off their tax bill. This practice is known as a Spouse Contribution and prior to 30 June 2017, very few couples took advantage of it because the income limits were too restrictive.
The great news is that from 1 July 2017, the rules changed to become more generous and now significantly more couples can take advantage of these new rules!
So what’s changed?
- Spouse’s taxable income is less than $37,000 pa
If you contribute $3,000 to their super, you get $540 off your tax! The $540 is not a deduction, but rather a tax offset so it actually reduces your tax bill more than a deduction would.
- Spouse’s taxable income between $37,000-$40,000 pa
If you contribute $3,000 to their super, you may get up to $540 off your tax bill. The tax rebate scales down as the spouse’s taxable income gets closer to $40,000.
- Spouse’s taxable income more than $40,000 pa
If you contribute a spouse contribution you get nothing as their taxable income exceeds the limit.
If you, or someone you know, would like to find out more about Spouse Contributions and whether you can take advantage of the new rule, then give our office a call and speak to either Andrew or Heidi.