Ahh the self-employed. For many it may be a dream and for some it is a challenging yet wonderfully rewarding reality. But when it comes to being a sole trader, a lot of us forget the most important part…looking after ourselves now and in the future.
Yep, this includes that vital income stream for when we retire – superannuation.
In Australia, if you are a registered sole trader or partnership, you generally don’t have to make super guarantee payments yourself (uh oh!).
I know I know, when we’re young we aren’t thinking about retirement, but let me explain why we should be…the more we can chip in now the more comfortably we will live later in life!
Did you know that most of us are able to claim a full deduction for the contributions we make to our super until we turn 75 years old?
It’s super important (see what I did there) to be making personal contributions to your super as a way to be prepared for when retirement approaches.
Okay, let me give you another reason why you should be making contributions. Depending on your taxable income, the government may even match your contributions up to certain limits. This is called the super co-contribution payment and unless you have claimed it as a tax deduction you may be eligible.
Put simply, worry now and a much smoother retirement will come your way. C’mon, who doesn’t want that?! I know I definitely do when the time comes.
If you’re like me and you enjoy being prepared, there are some criteria you must meet to claim a deduction or apply for the super co-contribution. So, if you are feeling unsure of whether or not you are eligible, fear no more! I will be more than happy to help with all your super needs at IM Business Solutions.
Oh, and one last thing, when it is time to make contributions, ensure you provide your super fund with your tax file number. If you miss this step, it will be much more difficult to keep track of your super and you risk your contribution being taxed an additional 34%…yep, 34%. Additionally, your fund will be unable to accept personal contributions from you, meaning you may miss out on any eligible super co-contribution.
So go on, be inspired to make those contributions before June 30 this year. Get in touch with IM Business Solutions should you need any advice or support for your business – we love hearing from you!