As the end of the year draws near, getting your tax in order is vital.
Tax planning can help all businesses and individuals to plan and manage their tax position as the end of the financial year draws closer. This process allows business to see the bigger picture and gain a head start with their tax obligations. Like assessing the need for any Division 7A repayments, utilising unrealised capital gains or losses and planning for the change in the company tax rates.
Tax planning is increasingly important this year due to the additional guidance on Section 100a. To read more refer to this article. (Link to Section 100a Article)
Tax planning simultaneously ensures savings on tax while addressing any legal obligations and requirements by discussing multiple ways to improve your tax position including:
• Writing off bad debts
• Claiming deductions for eligible research and development activities
• Prepayment of expenses before the end of the year
• Utilising carry-forward capital losses
• Checking depreciation rates on plants and equipment – including temporary full expensing which has been extended to 30 June 2023.
• Maximising your tax-deductible debt
• Toping up super to utilise carry-forward of unused concessional contribution caps from prior years.
Tax Planning also allows the smaller items like distribution resolutions, dividend statements that are usually left to the last minute to be prepared and ready for the new financial year. The most important part of tax planning is the plan of your tax position before June 30. This allows for you to understand your options to reduce tax payments and plan cashflow for tax instalments and the tax due on tax return lodgements.