Year End Tax Planning, it’s never to early!
YEAR END TAX PLANNING, IT’S NEVER TOO EARLY.
Can you believe it’s February 2020 already? We thought we would get in early and mention some tips on tax planning that you may want to think about over the coming months. Tax planning for the end of the Financial Year should not be left too late. Now is a perfect time and opportunity to review your finances and accounts, especially if you are expecting higher income than previous years. On the flip side it would be beneficial to review your situation if your income has dropped. Tax minimization and planning can be a very effective tool to legitimately save on tax. It is always better to be proactive rather than reactive.
To achieve best results you should review your tax group as a whole, individuals, companies, trusts, partnerships and self managed super funds. You should calculate & prepare year to date financial statements and project for a full year. This allows forward planning in relation to cash flow and deductions to be undertaken, all with the focus on tax saving.
If you are looking to selling your business & succession planning in the near future an effective tax plan gives you the best chance for a solid year end result to support the eventual business sale. A bad result could greatly affect a future sale as most sales refer to between 3 and 5 years of profit figures.
You might also take the opportunity to review the results of your superannuation and share portfolio performance and where necessary make changes. Now may be a good time to sell or buy shares to crystalize any capital gains or losses. It may also be a great time to check on year to date super fund contributions and remaining age based contributions limits available for the year.
As part of your review you should also revisit loan interest rates and terms to negotiate better rates with your bank, or even move banks if better deals are out there. You should also review your bank charges and again question your banker.
Insurances are often overlooked until required. It’s not unusual for taxpayers to under or over insure or simply miss items that should be insured. An annual review on all insurances, life, income protection, trauma, business insurance and other general insurances is a worthwhile exercise. Quite often the renewal date arrives and we don’t have the time to review the insurances before they are due.
Private health insurance is another insurance that should be reviewed annually. As taxpayers the majority of us pay the 2% basic medicare levy but there are some taxpayers paying the surcharge. If you are paying private health an annual review will ensure that you are covered for what you need to be. If you remove procedures and items that you won’t require your premiums may reduce.
Tax planning is an individual choice. Often our best intentions are to plan, but time or lack of it often intervenes. Some of the above items, if addressed, should help you to preserve your hard earned money.
To find out more call one of our qualified accountants on 07 5437 9900.
“Those who plan to fail, fail to plan.” Benjamin Franklin