BUSINESS TAX PLANNING EXPLAINED
Its tax planning time again, and this year saving dollars is more important than ever! We are sharpening our pencils and putting new batteries in our calculators ready to give your business numbers a good check over to see if there is any way we can help save you money and make sure your ticking all the boxes for tax compliance so you can sleep easy.
If you are unsure if your business would benefit from tax planning, or if your current accountant is not proactive in this area – just get in touch and we will let you know if we think it may be worthwhile for your circumstances. In most cases we find that the tax savings and tax law compliance benefits make it very much worthwhile. It also good to know your approximate tax payable next financial year and when that will fall due, so you can plan ahead for your cashflow needs.
WHAT IS TAX PLANNING?
Maybe we should call it a better name because it really does cover much more than just saving tax. I have listed below some of the key areas we look at when we conduct our review.
- Using our knowledge of your particular business circumstances, and our up to date tax knowledge, we review your business profit and work with you to decide the most tax-effective way to deal with the profit of the business for the year.
- We lookout for opportunities that MUST be completed before 30 June to be legal: such as paying associates salaries, superannuation contributions, distributions to trusts and spouses. It is really important that everything is documented in the way the ATO requires otherwise any strategies can be deemed non-compliant and you may pay more tax.
- We prepare any necessary documentation such as dividend resolutions, trust distribution resolutions, Division 7a loan agreements and minimum loan repayments.
- For companies, we update the franking account balance from ATO records to ensure we have a full picture of the tax you have paid during the year to maximize any dividend planning solutions.
- We go through the timing of your expenses and income recognition to identify opportunities for tax saving this year or next.
- We look for any major asset purchases and factor in the depreciation available in our calculations.
- We look at your debtors and work through with you if any should be written off as uncollectable before the end of the year and prepare the relevant minutes to document.
- If your business has stock we advise you of any opportunities to manage the value for the end of year stock count.
- We identify if there are further opportunities to restructure your business to better manage income and liabilities in future years where we identify your businesses has outgrown your current structure.
- We discuss where you feel we can best assist you over the coming year to make sure our services are proactive and relevant for your needs in these changing times.
TOP TAX REMINDERS BEFORE JUNE 30!
- The government has raised the Small Business Instant asset write off up to 30 June to $150,000. This means, if your cash flow and business circumstances permit, it may be beneficial to make any large asset purchases such as motor vehicle or machinery that you have been planning. We can refer you to a good finance broker if that is something you would like to look into.
- It is recommended you pay your staff superannuation at least a week before 30 June to ensure it is received by the super funds before that date to be able to claim a deduction in this financial year. If you have a pay run late in June we recommend paying the rest of the superannuation before then and then pay the last pay run as a separate payment to ensure maximum deductions this year. If cash flow doesn’t permit you to pay superannuation before 30 June, then just leave it until the normal due date in July and claim the deduction next year.