Importance of Tax Planning in Your Business

Why tax planning is important, and most importantly how it can help your business? If you are starting a new business or establishing new company then it is important that you have specified much knowledge in tax planning. Many business owners ignore tax planning and don’t even consider about their taxes until they are scheduled to meet with their accountant. But tax planning is an ongoing process and good tax advice is needed as the tax rates and rules are constantly changing. Similarly, it allows for certain opportunities plans to be put into place to potentially reduce the burden of any amount of tax that is required to be paid.

Here are the few tips in getting the tax planning exercise:

· Get your up to date record keeping and reconciled up to a specific date.

· Review your accounts receivable trade debtors to ensure you get paid on time and only taxed on total income billed. By doing this you will get time to chase those debtors who are outside your payment terms.

· Make sure all your business expenses are recognised and chase up to those suppliers who have yet to bill you.

· Review your asset register to capture any obsolete items which can be written off and a tax deduction taken up.

· Make sure your all payroll and superannuation are up to date, as well stay in regular contact with your accountant.

Tax planning is an essential tool for any business to undertake each year in order to effectively plan ahead towards the end of financial year and to ensure no nasty tax bills appear unexpectedly. Tax planning are typically employed to help a business achieve their financial and business goals. For businesses, it plays an important role in:

· Lower the amount of taxable income

· Reduce the tax rate

· Maximise tax relief/tax credits available

· Empower you to control when taxes get paid

· Put you in charge of the Alternate Minimum Tax

· Avoid the most common tax planning mistakes

Making sure you have covered all your bases ahead of financial year end will put you in good stead and may save you thousands or even more thousands off your tax bill. If you would like to discuss your financial position of business on Tax Planning Melbourne please contact Create & Protect Financial Planning via email at info@cpfinancialplanning.com.au or via phone at 1300 707 955.

CP finance helps you set and achieve realistic life & financial goals including managing debts, budgeting, retirement planning & protection against risk.

Love podcasts or audiobooks? Learn on the go with our new app.