What are the benefits of tax planning?

Tax planning opportunities and challenges are inherent in every transaction.

By the time the end of the financial year has arrived, it’s actually too late to make significant changes to your net tax outcome. However, by working with an accountant throughout the year – one who understands your business and financials – you’ll benefit from effective strategies that can minimise your overall tax payable while growing your net worth.

Every year, circumstances, tax legislation, and compliance responsibilities change, making it necessary to maintain, reassess, and monitor these strategies.

1. You can save tax. Tax planning is all about maximizing deductions to reduce the amount of tax your business pays.
2. Invest more –Knowing your tax liabilities allows you to reinvest funds that would otherwise have been earmarked for taxes.
3. Strategies – The tax planning process gives us a great opportunity to examine your business' options and fine-tune its strategies in all areas while we analyze its data.
4. Plan ahead – Tax planning provides an accurate estimation of trust distribution minutes well ahead of time, saving you the time and hassle of rushing.
5. Take control – Through our tax planning process, business owners can learn how compliance works, learn strategies for reducing tax, and take a more active role in their business' overall management.
6. Understand the bigger picture - Planning for taxes offers some great insights into a business that help owners assess the bigger picture: whether the structure of the business needs to change; where operations are taking place; where there are potential profit opportunities currently untapped or underexplored; how to structure new investments.
7. Optimising superannuation – With tax planning, you can take a look at your superannuation strategies and make them as effective as possible, with options such as salary sacrifice to super and self-managed super funds.
8. Feel at ease –Know your business's tax liability and make business decisions based on a firm, stable, factual basis, eliminating unnecessary stress and uncertainty.

Besides minimising your tax position, tax planning also allows you to budget for the next 12 months of tax payments. There can be a substantial difference in some cases.

Tax planning allows you to look ahead and budget for your tax liabilities over the next 12 months, as well as make decisions that may alter or reduce your tax bill. Typically, tax planning takes place April, so you have 12 months to budget for your end-of-year tax bill.