You’ve already read the heading and shuddered, tax time can be a rather dreaded time for many small business owners, but did you know that many small businesses are paying unnecessary dollars to the tax office every year due to no planning or advice from their accountants.
Yes, it’s only April, and while many don’t think about their tax until the final week of the financial year, the truth is thinking about your tax now will minimize any surprises at tax time, help you make strategic decisions and maximize your return.
What is Tax Planning?
Your accountant will request financial information up to the 31st March and estimates of income and expenses from April to June. This data is then used to prepare tax estimates and suggestions on tax minimization strategies.
Effective tax planning can save small businesses thousands of dollars every year. Tax planning is about looking at the entirety of your financial situation and ensuring that all facets work cohesively.
With the information that your accountant calculates from previous financial information, they can give you advice on what you can do before June 30 to reduce your tax liability. This can include various strategies including
- Using superannuation
- Prepaying some expenditure
- Restructuring your business
- Reviewing trust distributions
How Can Tax Planning Help Me?
Have you ever received a high tax bill with no warning? Not only can tax planning save you money but it will also reduce the shock factor, and get you prepared for your tax bill.
It is important to be aware of what your debts are going to be so you can plan financially to pay them off – we cannot run from tax.
Getting advice from a proactive accountant who specializes in small business tax needs, can save you time throughout the year and even more when it’s tax time. They will dedicate time and expertise to planning the best tax strategy for you, which will keep you in control of your end of year tax bill.
There is no one size fits all approach to tax planning but having a solid foundational tax strategy sets the stage for you to make better informed business decisions in the long term.
If you are wanting to see a positive tax outcome this year and save yourself some money, you might want to consider speaking to your accountant about tax planning.
Don’t wait until the very end of the financial year to think about or tackle your taxes, plan now and save yourself time and money!
Speak to our friendly team today about tax planning and the benefit it can have for you and your business.
Remember, managing your finances doesn’t have to be stressful! We’re here to help.
Until next time,
Whitson Dawson – Your local accounting experts