Why Tax Planning is Important

As business advisers, tax planning is a great opportunity for us to help you be proactive with your business, provide valuable input around your projected earnings and tax position and show you how the business is performing as opposed to how you think it’s performing. This planning can be extremely important for both the short and long term success of your business.

When is the Right Time for Tax Planning?

Our recommendation is at least once a year, but we commonly do this exercise four times a year for many business clients.

What are some of the tax planning strategies we suggest?

• Taking advantage of full expensing of assets prior to 30 June to obtain an immediate tax benefit for your business.
• Understanding any other incentives or tax law changes and how it will impact on you and your business.
• Reviewing the remuneration packages of the business owner(s).
• Maximising your superannuation contributions following past reforms, and detail any impact the reforms may have on you and your family group.
• Advising the minimum pensions to be paid from your superfund in order to earn tax-free income.
• Assessing the viability of any salary-sacrifice options.
• Reviewing your current business structure.
• Ensuring compliance with Division 7A in relation to Director’s loan accounts and unpaid present entitlements (unpaid trust distributions).
• Reviewing your ledger for potential unrecoverable debts or obsolete items of stock or equipment to be written off.
• Education in receiving dividends from your company and any top up taxes that might go into your personal tax return.
• Managing and advising you of your estimated tax position and any opportunities to mitigate tax.

At the end of a business and tax planning process with your accountant, you should expect to walk away with more insight into your own business and a greater level of surety to make short to medium-term financial decisions.

We have prepared a simple tax planning checklist for you to refer to if you are considering tax planning.

Please note this is an introductory guide and does not cover the full complexities that tax planning involves. Get in touch with your advisor to discuss tax planning further.