Having appropriate yearend tax planning strategies will make sure that you are in a good tax health. All the tax planning strategies will be made keeping in mind the most recent tax changes. Always have a tax planner, it will focus on the most important issues that small or medium business enterprises must consider.
Wherever required, proposed tax changes will also be highlighted. Hence, you must plan your tax well.
Why tax planning in advance?
It is usually about:
- Risk management
- Giving more on opportunities
- Manage tax exposure appropriately
Tax planning is done all around the year. Tax rate varies as per the business turn over. Dividends can get tax credits at 30% rate or 27.5% rate. Both rates are determined independently. The company can pay tax even at 1% rate of interest.
The franking rate is based on a hypothetical scenario. Take the company’s last year income, assume that it is its current year income and then decide the hypothetical tax rate. This will apply for the current year.
What are tax concessions?
Small businesses are entitled for some tax concessions such as:
- Immediate deduction for depreciating assets.
- Small businesses restructure roll-over.
- Trading stock rules.
- PAYG tax instalment rules.
Small business entities will have the benefit of instant asset write off for most new or second hand depreciating assets.
Cost of depreciating asset is completely deductible if acquired for a cost below relevant threshold. Instant deduction is also applicable.
For any start-up, there’s an immediate deduction of all start up costs incurred in the respective income tax year. Start ups can even change their business structure without any capital gains tax or income tax consequences.
Business structure can vary depending on the business needs. Certain number of conditions must be satisfied and here, you need the advice from an expert tax advisor as the one available at PnD accountants.
Conclusion:
Tax world is full of variations. This also leads to the changes in strategies. Hence, whenever you plan for year-end tax planning, make sure to check whether your current business structure is suitable for the present situation or not.
Use a tax planner to get ongoing ideas. You can approach PnD accountants for the same.
