Allow us to set the scene. The date is the 30th of June. Your morning coffee is already coursing through your veins, you are feeling fresh as a daisy and there couldn’t be a better time to think about the tax you may or may not need to pay next financial year, right?
Wrong. A last-minute approach will not get the best possible results, in fact you could be paying thousands of extra dollars in tax when you didn’t need to. Now that’s out of the way it’s time to look at why meeting with a business accountant and planning for your tax is an absolute necessity for your business.
Surprises! You either love or hate them, but hopefully, we can all agree they don’t go well together with tax. Planning for next year’s tax will ensure that you won’t be knocked down by a feather with a higher than the expected tax bill.
Next up, we have the universally adored, savings. Reducing your tax bill is the primary purpose of tax planning as many businesses end up paying more than they have to. If you would like peace of mind knowing you are not paying too much or too little, planning is the best way to achieve it. Think what you could do with the money saved!
Stay in the know.
To get the best possible outcome from your business this financial year, you need to know the ins and outs of the recent budget updates. At Orbit, we stay up to date on all of the latest schemes, budget updates, and tax information to make sure our clients don’t miss out on any changes that could benefit their tax position.
Make the right deductions.
Have you ever been told to pay your Superannuation early to gain a tax deduction? Deductions are not always the best call for your business as it all depends on where you are standing.
For some businesses, an early superannuation contribution may be an unnecessary deduction as they might not actually need a tax deduction on that particular year. In fact, it might be in a business’s best interest to hold off until the due date if cashflow is an issue and the deduction isn’t required. On the other hand, other businesses will benefit from bringing forward expenses and claiming the deductions this year to meet their immediate tax obligations.
If knowing how to make the right tax deductions is uncharted territory, planning will empower you to make the right decisions.
Get a birds-eye view.
Discovering the hidden story behind your figures will provide you with a fuller understanding of how it’s tracking. Tax planning helps you see the big picture and provides invaluable insights into your business. This information will also give you the foresight you need to plan an effective strategy for next year’s tax too.
Remember, time is of the essence.
If saving cash, making informed decisions and avoiding any nasty surprises still hasn’t tempted you to venture into the world of tax planning, having time to ensure you meet your legal requirements might do the trick.
Run a trust? Writing up your trust distribution minutes is a requirement for your business. Planning for tax means you can ensure that you have plenty of time to write down a close estimate of the trust distribution for next year and meet the legal obligations of the ATO.
So if tax deductions only take up real estate in your mind the week before June 30th, keep in mind all the things you could be missing out on.
At Orbit, we are proactive small business accountants which means we love nothing more than helping you achieve the best possible tax outcomes. We accomplish this by reviewing your projected financial position to make clear recommendations on legally reducing your tax well before the June 30 deadline.