Tax time is fast approaching and with the current economic climate starting to shift its good to start your tax planning early. As FY22 comes to an end we begin to look ahead to the upcoming annual tax season. After a particularly strange year in the global economy, and with a small amount of uncertainty moving forward, most of us in business would prefer more cash in our own pockets right now.
Tax planning involves identifying what can be done to legally minimise, defer or eliminate tax you may otherwise be liable to pay.
Some recommendations for this could be:
· The appropriate use of superannuation contributions
· Deferring income where possible
· Reviewing income received for any income received in advance
· Bringing forward expenditure that will be incurred in the foreseeable future
· Utilising Government incentives (e.g. Investment Allowance, Small Business Write Off)
· Farm Management Deposits
· Effective use of both income tax losses and capital losses
· Negative gearing opportunities
· Expense prepayments e.g. leasing rent
· Assessment of tax benefits on fixed asset acquisitions
Tax reduction strategies typically reduce the tax liability. An unexpected and unnecessarily big tax bill can cause cash flow issues for your business and in some cases, it could also put your family home at risk. Further, if your business cash flow is tied up in meeting tax obligations, you may end up struggling to maintain business operations instead of funding the growth you were hoping for.
Tax planning enables you to manage your business cash flow so that your tax payments can be made in a comfortable and timely manner that doesn’t disrupt business operations. We can help you create a payment schedule for your tax liability that considers the other known demands on the business cash flow in the year ahead. This means you will be able to satisfy the ATO as well as meet other essential cash flow commitments including for suppliers, wages, salaries, and insurance.
With more and more local and federal tax legislation changing by the day, tax planning is more important now than ever before. Properly planning your business model around the taxes, you have to pay can make or break your business. At VBA we work with you to structure your business and personal affairs to meet your current and future goals, while complying with all statutory and regulatory reporting requirements.
As your accountants, we help you work out your expected profit, taxable income, and likely tax commitment for the current financial year.
Due to the complicated nature of some of these Tax Planning tips, we highly recommend scheduling an appointment with your accountant to discuss the specific benefits to your business.
To find out more about how tax planning can benefit your business, please contact us today on 07 5479 5499 or info@vbatax.com.
At VBA we specialise in strategic tax advice, offering tax and financial reporting for individual income earners, family businesses, tradies and construction companies.
Victor Bimrose Accountancy Pty Ltd (ASIC No. 1259423) ABN 53 010 957 294 is a Corporate Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361.
Mark Foxley-Conolly (ASIC No. 1259421) is a Limited Authorised Representative of Merit Wealth Pty Ltd ABN 89 125 557 002, Australian Financial Services Licence Number 409361
General Advice Warning: This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.
