It’s hard to believe we’re at the pointy end of another financial year.
And you know what this means? Yes, it's tax planning time.
Tax planning involves reviewing your year-to-date trading performance, estimating the profits for the remainder of the year and calculating likely tax payable.
The end goal, of course, is to ensure you’ve maximised your tax benefits and minimised your tax liabilities. So let’s take a look at the opportunities as well as the latest compliance rules you need to be aware of.
Before the 30 June deadline hits, here are some of the strategies that may be available to you to reduce the amount of tax you need to pay:
While these tactics can help you reduce your liabilities, they do require you to spend money to save on tax. Because of this, it’s important to review your cash flow position and forecast to ensure your business can fund them.
When tax planning, as well as employing strategies to reduce your tax liabilities, it’s vital that you ensure ongoing compliance with the rules.
If you aren’t already aware, the government recently announced some anti-avoidance provisions that must be considered:
If so, closer attention must now be paid to who the trust distributes to and whether the beneficiary receives an enduring benefit from the distribution.
This basically means cash must follow any distribution of a trust made to adult children without the expectation of having it paid back.
If so, there are new rules regarding who ultimately pays tax on the professional income.
Closer attention must be paid to how business profits are paid to the professional versus a non-professional (such as a non-working spouse) to ensure the arrangement is not flagged at risk of ATO review.
By taking advantage of the various tax deductions and concessions available this year, you can reduce your tax liability and improve your financial position.
When tax planning, it pays to work with an experienced advisor. They can help you review your cash flow position to ensure you have the funds to reduce your liabilities and advise you on the latest compliance rules.
Reach out to your Maxim advisor or contact our team today to schedule a tax planning review of your position to ensure you get it right.