Tax Planning. What you need to consider.
‘What is ‘tax planning’?’
Tax planning is a vital component of your broader strategic business planning. Tax planning is strategic action taken prior to the end of the financial year to reduce your taxable income, therefore legally minimising tax liabilities. Reducing your tax liability increases opportunities to contribute to long term financial goals. Now is the time to take action on tax planning.
‘What are the most common ways to reduce my taxable income?’
The most common ways to reduce your taxable income are:
Bringing forward/prepaying expenses
Paying expenses in advance will reduce this financial year's taxable income; however, this will impact on your next financial years' tax liabilities. Finding a balance that fits with broader financial goals should be your target, and this is where Bizally can help.
Paying superannuation liabilities early
Paying your employee's superannuation contributions for the June quarter before 30 June enables you to claim a deduction in the current financial year. If cash flow permits, this can be a good strategy.
Making additional superannuation contributions
Increasing superannuation contributions for yourself before 30 June means extra deductions. Talk to Bizally about the latest rules of superannuation contributions.
Taking advantage of instant asset write-offs
As a small business owner, you can instantly write off some assets. If you are planning on purchasing new equipment, bringing the purchase forward can minimise your current year tax liabilities. If you are unsure of what type of assets and how much you can write off, talk to the Bizally team.
Reviewing debtors and writing-off unrecoverable amounts
Identifying debtors that are unlikely to be recovered and writing these amounts off will reduce your taxable income. Depending on your business type, this can have a dramatic impact on your tax liabilities.
Bizally’s Tax Planning Service
Included in all our fixed price Small Business Packages is our annual tax planning service. This comprehensive service reviews your year-to-date income and expenses and ensures that you take advantage of any opportunities to minimise your tax liabilities.