Super Statements & Tax Time
October is the big financial month of the year for Australian households. This is the time when annual statements from your super fund usually arrive. It’s also the month when income tax returns are due. This time next year, most people will also realise they can shift their super contributions (and possibly their account balances as well) to another super fund. But more on that later on when the rules come out.
One thing our politicians and federal public servants have been very good at over the years is persecuting the populace into excessive complexity on tax and super. Forty years ago the income tax return and guide occupied about a dozen pages in total. This year the income tax return (including supplement) is 12 pages and the guide is 196 pages, making 208 pages in total. The Income Tax Act was 120 pages when it was introduced in 1936 and is now 6,700 pages!
For super it has been much the same story. Forty years ago $1200pa ($24,000pa in today's wages) of your personal contribution to super were fully tax-deductible. When you retired, you added 5% of your lump sum benefit into taxable income in the year you retired and that was the end of it for tax on benefits. Now taxes are taken out of contributions at 15% and 30% (if you are "surcharge-able" - now there's a term to get you fired up!), 15 percent out of investment income every year and 15% of Lump Sum benefits(if they are not over the 'RBL' - is in which case it increases to the top marginal income tax rate) – did you follow all that? – and that’s the simplified version!.
But enough of this whingeing. Let's get positively practical about making the most of your super. FinDem is developing software for a new “SUPERTOOLS” section of the Research Centre. We will let you know when it is finished through a News item. Meanwhile if there is anything you would like included in SUPERTOOLS, just Contact Us with your wish list. To get an appetite check out the links we have added to a new section in Links at http://www.findem.com.au/resources/resourcesarchivek.php#superannuation
Posted Sunday, 31 October 2004
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