As the end of the financial year approaches, Australians who have made voluntary superannuation contributions are being urged to act quickly to ensure they don’t miss out on potential tax breaks. Today, June 30, marks the deadline for submitting a crucial form that could affect their ability to claim a tax deduction on these contributions.
The Australian Taxation Office (ATO) has issued a reminder that individuals must lodge the Notice of Intent to Claim (NOI) form by today. Without this submission, voluntary superannuation contributions will not be eligible for the tax benefit that comes with pre-tax payments. The form is essential for ensuring these contributions are taxed at a reduced rate of 15%, compared to the higher marginal tax rate of up to 47%.
What is the Notice of Intent to Claim form?
The Notice of Intent to Claim (NOI) is a straightforward form that must be submitted to the ATO if individuals wish to claim a tax deduction for voluntary superannuation contributions. This form provides the ATO with the necessary details to treat the contribution as if it were made from pre-tax income.
By submitting the NOI, the taxpayer ensures that their voluntary contributions are taxed at the concessional 15% rate, rather than their personal income tax rate. This can result in substantial tax savings, especially for those in higher income brackets.
Why is it Important to Lodge The NOI?
Financial adviser Nicole Gardner has warned that many Australians overlook the necessity of submitting the NOI form. According to Gardner, people often assume that by making a lump sum contribution, they automatically qualify for the tax deduction. However, without the NOI form, these contributions will not be treated as pre-tax, meaning taxpayers could face much higher taxes on their superannuation.
The ATO only accepts the form as a valid request if it is lodged by the June 30 deadline. If this step is missed, taxpayers will lose the opportunity to reduce their taxable income and benefit from a lower tax rate on their super contributions.
Potential Financial Consequences of Missing The Deadline
Missing the June 30 deadline can have significant financial consequences, especially for those in higher tax brackets. According to financial data from Motley Fool, Australians aged 55 to 59 contribute an average of $5,027 to their superannuation each year.
If an individual in this age group is subject to the highest income tax rate of 47% and fails to lodge the NOI, they could miss out on a potential tax break of $1,608. This highlights the importance of ensuring that the NOI is filed on time to avoid unnecessary financial loss.
Common Mistakes Made by Taxpayers
One of the most common mistakes that leads to missed NOI submissions is when individuals make lump-sum payments directly from their bank accounts, often without consulting an accountant or financial adviser. According to Gardner, these individuals may believe that simply making the contribution is sufficient to claim the tax deduction, unaware that the NOI form is required to complete the process.
Gardner’s advice is to ensure that the form is lodged as soon as possible to avoid any confusion or delays. She emphasized that many Australians miss out on tax savings each year simply due to this oversight.
Lodging the Notice of Intent to Claim is relatively simple. The form requires basic personal and superannuation details, including your Tax File Number and the contribution amount. Once completed, the form must be submitted to the ATO before the deadline. Financial advisers recommend that individuals act quickly and ensure they have the correct information on hand to avoid missing out on this important tax-saving opportunity.
