Tax Planning: Sleep Better This Year With These 6 Strategies

Tax planning strategies at a glance:

1. Properly plan your cash flow
2. Carefully consider your tax payment dates
3. Pay superannuation liabilities
4. Bring forward other expenses
5. Make additional superannuation contributions
6. Vary down instalments

Are you concerned about taxes? Unfortunately, tax worries have the power to keep business owners up at night. Income tax is one of the biggest expenses for most businesses and for most individuals. If this expense becomes too large, you may struggle with cash flow, debt repayments, and other obligations. 

There is a solution to these worries, however. Implement tax planning strategies (or Annual Planning Strategies as we like to call them) that will reduce your expenses and give you more funds for expanding, strengthening, and growing your business or for building your nest egg for the future. 

Yet tax planning isn’t just for businesses. Planning your taxes for your own personal finances is just as important. Some of the strategies listed below work well for both businesses and individuals, and all of them can save you money and stress.

 

Annual Tax Planning Strategies

If you can manage to reduce your taxes, you can work toward the future with optimism and clarity. Let’s take a look at 6 tax planning strategies that will help you with your tax planning.

1: Properly Plan Your Cash Flow

When your cash flow is orderly and consistent, you can better understand your tax obligations and focus on your core business. An orderly cash flow lets you see how taxes affect your income so you gain a better position to make positive changes to your business.

2: Plan for Payment Dates

Missing a tax payment date can have serious consequences, like fines and strain to your cash flow. Be prompt by carefully planning for your tax payments so you can avoid unnecessary expenses.

3: Pay Superannuation Liabilities

You can obtain a deduction a year earlier by paying your superannuation liabilities. Planning for an early deduction can give you increased flexibility in your budget and cash flow.

4: Bring Forward Other Expenses

This tax planning strategy is similar to the strategy of paying superannuation liabilities. When you bring forward other expenses, you can obtain the deduction this year, thus reducing your immediate tax obligations.

5: Make Additional Superannuation Contributions

Increasing your super balance while reducing your personal taxes at the same time sounds like a win-win proposition. You can do this by making additional superannuation contributions to your super fund. For more information on voluntary superannuation contributions, download a copy of our popular Retirement Planning eGuide.

6: Vary Down Instalments

If you vary down instalments, you can avoid overpaying your income taxes and having to wait until your return is lodged to receive the cash back. Having this additional cash today gives you the capability to use it to pay other bills or reduce your debts.

 

Annual Tax Planning Meeting

Your annual tax planning process doesn’t need to be complicated, but it should be thoughtful. Working with your Altus Adviser, you can evaluate your current tax strategy and find ways to further optimise your tax situation.

Have you had your Annual Planning Meeting (APM)? To learn more about the Annual Planning Meeting, or to talk about any other financial concerns that keep you up at night, contact us at Altus Financial.