How to Minimize the Risk of an IRS Audit
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- Division 293 tax is an additional 15% tax on concessional (before-tax) super contributions when an individual's combined income and super contributions exceed AUD $250,000 in a financial year.
- The tax applies to employer Super Guarantee contributions, salary sacrifice amounts, and tax-deductible personal super contributions, while total income calculations also include taxable income, investment income, and reportable fringe benefits.
- Although Division 293 increases the effective tax on eligible super contributions from 15% to 30%, superannuation remains one of Australia's most tax-efficient retirement savings vehicles.
- High-income earners can reduce unexpected tax liabilities by monitoring their total income, tracking concessional contribution caps, reviewing salary sacrifice arrangements, and planning contributions strategically.
- Understanding Division 293 tax helps individuals make informed retirement planning decisions, stay compliant with Australian Taxation Office (ATO) rules, and maximize long-term superannuation benefits.
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Book a Free ConsultationCommon IRS audit triggers include underreported income, excessive deductions, unverified charitable contributions, and mismatched W-2 or 1099 forms. Even simple math errors or filing inconsistencies can flag your return for review.
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