If you limit your tax-time focus to creating tax reports and meeting prescribed tax payment schedules, you could end up paying more tax than necessary.
There’s no question that the two are essential, however with a little advance tax planning you stand to make meeting your inevitable tax obligations more favourable. Keep reading to find out how advance tax planning can shrink your tax bill and allow you to take advantage of other significant business benefits.
Don’t make the mistake of confusing advance tax planning advice with tax return preparation. They’re different.
Advance tax planning comprises higher-level advice and is an essential underpinning for a proactive and forward-looking approach to the financial management of your business and personal finances. Tax reporting and tax return preparation, in contrast, are retrospective.
Tax planning is specific to individual circumstances, but in general you should be considering the opportunities available to you for optimising your tax situation around the final quarter of each financial year (mid-April / May). This timing is critical as it still gives you time to identify and then implement actions to enable you to benefit from tax efficiencies.
If you wait until June 30, those opportunities and outcomes will cease to exist. Your tax commitment for the year will be set and you will have few, if any other option but to pay the tax necessary to meet your obligations.
Advanced tax planning advice involves a formal discussion with your accountant to identify business matters that can mitigate or better still, help you avoid negative tax impacts, including paying more than is necessary or receiving the nasty surprise of having to pay more tax than you expected.
Negative tax impacts like these commonly affect your cashflow, debt management, equipment and material purchases, the amount of tax you pay, and ultimately for the business owner – your personal prosperity.
For example, you may have decided to purchase or lease new equipment to scale up production. When and how you complete that transaction could have significant financial benefits or consequences in terms of your tax obligation and/or your cashflow position.
For the best possible outcomes for your business, advance tax planning and business advice can make a considerable difference to outcomes that affect your business success and as the business owner – your personal prosperity.
Your Next Step…
At Core, we offer tax report preparation services AND advanced tax planning advice. To learn about the benefits of advanced tax planning for your business or to make a tax planning appointment, please contact your Core business accountant on 07 5438 8088, email firstname.lastname@example.org, visit our Tax Planning page or send a message via the website.
At Core we specialise in business advice and SMSF strategies for growing and mature family-owned businesses and small and medium-sized enterprises (SMEs).