Business Tax Planning

It is the process of organising the affairs of your business in such a way to reduce its tax liability to the smallest legally and commercially possible amount. Such planning involves implementing strategies to reduce tax, planning for upcoming tax payments, as well as maximising any tax opportunities available to your business.

Properly structured tax planning can benefit your business in several ways, including through saving your business money, as well as allowing you to properly plan for upcoming expenses

To speak to a talented business tax planner about how you can better prepare for taxes, get in touch with Taggart & Partners today.

Determining the correct tax planning strategies for your business will be determined by a multitude of factors, including aspects such as the size and structure of your business, and whether your business is product or service based. However, several common and effective strategies can be implemented for most businesses..

Consider a tax status change: Specifically relevant to small businesses, the structure of your business will determine how you file your taxes and subsequently how much you owe. Tax structures and obligations differ between sole traders, partnerships, and companies to name a few.

Utilise tax deductions: By maintaining accurate spending records throughout the year, meaningful tax deductions can be claimed with ease while filing your business taxes. Through planning for ongoing expenses throughout the year with a business tax planner, you can best prepare for future tax obligations.

Speak to Taggart & Partners about how to effectively plan for your businesses tax obligations, get in touch today.

The benefits will differ depending on your business structure and goals, however some key benefits can be expected from proper planning.

The main goal of tax planning is to reduce tax liabilities, reducing the amount of cash outflows your business experiences. Proper business tax planning also allows you to optimise your cash flow through careful management of the timing of income recognition and expenses. Another key benefit of tax planning is the reduction of tax risk and compliance issues. By laying out a long term tax plan and staying up to date with best tax practises, your risk of non-compliance is greatly reduced.

Every business should know the answer to three simple questions:

1) How much tax needs to be paid?

2) Who needs to pay the tax due? i.e. which individual or company.

3) When does the tax need to be paid?

With effective tax planning every business owner should know the answer to these three questions eighteen months in advance. Knowing the answers to these questions allows a business owner to plan for future tax events. Effective tax planning will also provide a business owner with peace of mind in the knowledge that only the correct amount of tax is paid and that any tax payable is not paid any earlier than necessary.

Engaging a small business tax planner to manage your tax affairs is recommended for businesses of all sizes. Overall, proper tax planning can improve your bottom line, which is essential for all businesses. Tax planning also helps reduce the risk of unexpected costs which can severely impact your operations. While big businesses often have cash reserves to address these unexpected issues, smaller businesses can avoid these extremely disruptive issues before they arise by using the services of an effective tax planner.

Short-Term Tax Planning: Completed at the end of the financial year, short term tax planning investigates methods to reduce tax liability from the current year. This method does not incorporate long term planning, but can still offer great rewards.

Long-Term Tax Planning: This plan is laid out at the beginning of the financial year and is implemented by a business over a 12 month period. While this method does not provide immediate benefits like short term planning does, this method is beneficial over the long term.

Permissive Tax Planning: This type of tax planning sees businesses make plans which are permissible under certain provisions of the Australian Taxation Laws by utilising methods of tax exemptions and deductions.

Purposive Tax Planning: Refers to planning business expenses with specific purposes in mind, such as timing investments to achieve maximum reward, arranging suitable replacements of assets, and diversifying business operations.

Taggart & Partners proudly offer expert business tax planning services. Get in touch today to begin meaningful tax planning.