Advanced tax planning is the cornerstone of effective tax management. Here’s why…
For the most effective tax outcomes concerning tax deductions and concessions, you need to start tax planning well before the end of the financial year, so you will have plenty of time to take a more proactive or ‘big picture’ approach to the financial management of both your business and personal finances.
With the end of the financial year fast approaching, it’s vital to finalise the strategies you put in motion at the beginning of the year or to start your tax planning NOW, so you have time to implement tax-effective actions that can significantly improve your tax outcomes.
Advanced tax planning is more than compliance matters such as tax reporting (the preparation of tax returns as required by the ATO) and tax payments/returns. Advanced tax planning offers higher-level advice, specific to individual circumstances, that considers the opportunities available to you to achieve tax efficiencies. Decisions which may affect your tax position include depreciation of assets, purchases of assets and superannuation contributions and planning.
Here are our THREE tips to help you reap the benefits of advanced tax planning:
TIP #1 There’s more to tax planning than your tax return
A common misunderstanding by business owners is that your tax bill is solely reliant upon your tax return preparation. It is true that careful tax return preparation is important, but it will be too late to put tax saving mechanisms in place if your tax return is your sole focus.
Rather, you need to take a strategic approach to your tax management that goes above and beyond the mere compliance matter of completing your tax return correctly. The most appropriate tax strategies for your business will be identified when you undertake advanced tax planning, which enables you to reduce your tax obligations.
Strategies to achieve optimal tax efficiencies should consider your overall business objectives as well as outcomes including cashflow, debt management, equipment and stock and raw materials purchases, the amount of tax you pay and, ultimately, your personal prosperity as the business owner.
TIP #2 Give yourself planning time – the earlier you start the better
The more time you have to explore your options, the more opportunity you have to better manage your tax. We can partner with you and help you plan ahead (not just work backwards) to identify issues and implement a plan to reduce your tax liability and/or consider your cashflow to better manage your tax obligations.
By examining your financial reports from July to March, we not only estimate your income and expenditures to calculate your expected tax obligation for the current financial year, we can identify appropriate strategies to help your personal and business outcomes for the next financial year.
TIP #3 Make the most of opportunities
By partnering with you, we can help you identify opportunities which are most appropriate for your business and personal outcomes, including deferring tax to ease cashflow and making the most of deductions and concessions for which you are eligible, all with the goal of reducing your tax bill.
For example, you may have been planning a major asset purchase such as vehicles or equipment in the near future. We can review the planned purchases from a tax management point of view and identify if it is more tax advantageous to purchase in the current or next financial year, as well as considering strategies to assist with your cashflow.
Our tax planning strategies may also address debtors, bad debts and inventory valuation methods as these may allow you to defer income and accelerate deductions or vice versa.
We will also review your superannuation contributions and recommend strategies for your situation which may reduce your personal tax liability and contribute to your long-term personal prosperity.
Finally, if you utilise a trust in your structure, we can assist with a carefully considered trust distribution strategy to help you achieve optimal tax outcomes.
Your next step…
Meeting our tax obligations doesn’t mean we have to pay more tax than necessary, disrupt cashflow, forfeit important goals or impede the smooth operation of business.
At P+Y, tax planning is among our key advisoryservices. Tax planning is an overarching service that includes advice for tax-efficient structures, ownership and holding assets. Numerous tax planning measures with short-term and long-term tax-effective outcomes are available to you. Leave it too late, and you simply won’t have the time you need to implement tax-effective actions, and you will very likely, pay more tax than you actually need to.
Please take a moment to read about P+Y’s tax planning solutions that we have designed to cater for your varying needs. Now is the time to put your tax planning strategy in place to ensure you achieve the best outcome possible. Contact David david@py.com.au or Brenden brenden@py.com.au or phone 3217 5700 to arrange your tax planning meeting, and let’s talk and work together to make a positive difference.
P+Y Accountants and Business Advisors are known for expanding the possibilities for professionals and enterprising business owners.
The information contained here is general and not intended to serve as advice. Any information supplied is not a substitute for independent professional advice. We do not warrant the accuracy, reliability, completeness or adequacy of the information or material. All information is subject to change without notice. P+Y and each party providing material displayed here disclaim liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. Users are encouraged to contact P+Y for advice concerning specific matters before making any decision
