Tax planning is one of the most crucial aspects of building a strong financial platform for both you and your business. It can help you reduce your tax burden, freeing up money for other important things for either your business or personal life.
What is tax planning?
Tax planning is the process of analyzing your overall financial situation to legally minimise your tax liability and, therefore, allow you to keep more of the income you earn. It plays a significant role in your financial plan as it provides a better understanding of the tax deductions and benefits that you qualify for.
Tax planning needs to be undertaken before the 30th of June– after that, it is almost impossible to achieve the best tax outcome for you and your business.
Benefits of Tax Planning
Reducing the Income You Pay Tax On
A huge part of tax planning for individuals is making use of tax deductions to reduce taxable income and maximise refunds. It enables you to avoid paying more than necessary and helps you create wiser financial decisions. This, in turn, gives you more income than you can channel into other things like an overseas holiday, superannuation, investments and just increasing your disposable income to name a few.
Save for retirement
Effective tax planning can generate useful results in the long run. This is especially the case for retirement savings which can grow tax-free over time. By getting a clear overview of your tax obligations, you can easily allocate a portion of your income to your retirement plans
If you’re an individual who makes extra personal superannuation contributions and claims tax deduction for them, you can significantly reduce your taxable income
Estimating your Tax Result In Advance
Tax planning aims to minimise your tax liabilities whilst maintaining compliance with existing tax laws.
Aside from that, it can also inform you in advance about your expected tax result at the end of the financial year. The great benefit of knowing your tax result is that you can then take steps to improve your result by either reducing the amount you are required to pay or increasing your expected tax refund.
Ensures financial stability for your business
One of the goals of tax planning for businesses is ensuring you get the best possible tax result. Planning provides long-term stability and maintains your business’ commercial efficiency. By legally minimising tax liabilities and availing of relevant tax deductions, you can use capital to improve your business.
How can I implement tax planning strategies in my business?
Tax planning requires a good understanding of your financial situation and in-depth knowledge of tax laws and strategies. Consulting an expert tax accountant or registered tax agent can help ensure that you and your business are in the best possible position come tax time.
Craig Allen and Associates is best placed to help you plan your tax result before 30 June. We also are in a great position to provide extra services including attending to your bookkeeping, taxation and business needs so that you can concentrate on more profitable activities. Schedule a free, no-obligation consultation now by contacting our team at 039 558 7316 or emailing us at craig@craigallen.com.au.
SHARE THIS ARTICLE
