Self-Managed Superannuation Funds (SMSFs) give Australians greater control over their retirement savings. However, with this control comes the responsibility of managing the fund in compliance with the law. One important aspect of SMSF management is meeting tax deadlines. In this article, we’ll discuss what SMSF trustees need to do before the tax deadline to avoid penalties and ensure their fund’s compliance.
Review financial statements: SMSF trustees should review their financial statements before the tax deadline to ensure they are accurate and complete. Financial statements should include a balance sheet, income statement, and statement of changes in equity. Trustees should also ensure that their fund’s records are up-to-date and reconcile with their financial statements.
Lodge the annual tax return: SMSF trustees must lodge their fund’s annual tax return with the Australian Taxation Office (ATO) by the deadline. The tax return must include details of the fund’s income, expenses, and assets. Trustees should also ensure they have provided all necessary documentation, such as statements from financial institutions and investment managers.
Make concessional contributions: SMSF trustees can make concessional contributions, such as salary sacrifice contributions, to reduce their fund’s tax liability. However, these contributions must be made before the tax deadline to be eligible for a tax deduction.
Pay any outstanding tax: SMSF trustees must pay any outstanding tax by the deadline to avoid penalties and interest charges. Trustees can pay their tax bill using the ATO’s online payment system, bank transfer, or credit card.
Review investment strategy: SMSF trustees should review their fund’s investment strategy before the tax deadline to ensure it is still appropriate for their fund’s needs. Trustees should consider factors such as their fund’s objectives, risk tolerance, and liquidity needs when reviewing their investment strategy.
According to the ATO, “Meeting your SMSF’s annual tax obligations is an important part of managing your fund. Failure to lodge your fund’s tax return or pay outstanding tax by the deadline can result in penalties and fines.”
It’s also worth noting that SMSF trustees have additional reporting obligations, including lodging an annual return for the SMSF’s regulatory status and reporting member contributions. Trustees should ensure they meet all their reporting obligations before the tax deadline to avoid penalties.
SMSF trustees must complete several tasks before the tax deadline to ensure their fund’s compliance and avoid penalties. These tasks include reviewing financial statements, lodging the annual tax return, making concessional contributions, paying any outstanding tax, and reviewing their investment strategy. Trustees should also ensure they meet all their reporting obligations before the deadline.
References:
Australian Taxation Office. (2021). Self-managed superannuation funds. Retrieved from https://www.ato.gov.au/Super/Self-managed-super-funds/
Australian Taxation Office. (2021). SMSF annual return. Retrieved from https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-annual-return/
Australian Taxation Office. (2021). SMSF trustee obligations. Retrieved from https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-trustee-obligations/
Australian Taxation Office. (2021). SMSF reporting. Retrieved from https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/SMSF-resources/SMSF-reporting/
