By David Heycock
The latest Tax Office statistics show almost 300,000 self-managed Superannuation funds (SMSF) eliminated or radically reduced their tax bills through exemptions in Super. What about you? How much tax is your SMSF paying?
Most people know that the tax rate in Super (both on contributions and on earnings) is 15%, but what they don't understand is this is a MAXIMUM rate of tax. Because your Super fund is taxed as a whole, any tax deductions flowing through have the capacity to reduce the total rate of tax all the way down to zero!
So what if you are only paying, say, $2,000 per year in tax? Is that worth saving? Well the answer is ABSOLUTELY! This is because any savings you make in Super begin to immediately compound in earnings; and small amounts can climb to lofty highs. Take $2,000 pa in savings and apply an earnings rate of just 5% pa (non-taxed) and in 20 years you'd have a massive $98,846.00 extra in your super account. And this would be without contributing one extra dollar to your fund.
Are you taking advantage of all of the various tax savings that are available in super? Ask your professional adviser or attend one of our free super seminars.