DEADLY IMPACT OF MISSING TAX FILE NUMBER DEADLINE ON SUPER
by Louise Falsone, 29/03/2007

If your superannuation fund does not have your tax file number (TFN) from 1 July 2007:

• Your super fund will have to pay extra tax on concessional contributions (currently known as deductible contributions) made to your super account, such as:

• Contributions your employer makes for you, including salary sacrifice contributions, and

• Contributions you make and claim a tax deduction for

For Super Funds opened before 1 July 2007:
If you have not quoted your tax file number (TFN) to your fund, these contributions will be taxed at the top marginal tax rate plus Medicare levy (48.5%), instead of the usual 15% if your concessional contributions exceed $1,000.  It will also apply to the first $1,000.  (i.e.  your concessional contributions will be taxed an extra 31.5%)

For Super Funds opened on or after 1 July 2007:
If you have not quoted your tax file number (TFN) to your fund, ALL concessional contributions will be taxed at the top marginal tax rate plus Medicare levy (48.5%) (ie  the contributions will be taxed an extra 31.5%).

Super funds are required to pay the higher rate of tax to the ATO at the end of the income year for accounts that have not provided their TFN. So this will give you, in effect from now until 30 June 2008 to give your TFN to your super fund if you have not already done so…however you may miss out on making any other types of contributions by waiting til 2008.

From 1 July 2007, your super fund will not be allowed to receive certain non-concessional contributions (personal contributions made from a person’s post tax income) unless you have given them your TFN

The contributions your fund will have to reject are most likely to be the contributions:

• You personally make but don’t claim as an income tax deduction (currently known as “undeducted contributions”), and

• Your spouse makes to your super account for you

You may also miss out super co-contributions you may be eligible for.

There may be time before now and 1 July 2007, however as time ticks by so quickly I recommend you provide your tax file number (TFN) to your super fund now before you forget.  Additional tax and not being able to make personal contributions, and missing out on co-contributions, could greatly impact on your superannuation nest egg and limit your plans in retirement.