The key to tax planning is simplification
With June fast approaching, it’s time to think about your tax planning.
Everyone is trying to convolute the process, making it sound far more complicated than it needs to be. Instead, we recommend taking a more measured approach.
Start by accepting tax is just another cost and like all costs you need to review it. Do this by following these 3 easy steps.
- Step 1: Review your plan
Right now is the time to ensure your results for the end of the year are in line with your corporate plan – it’s time to forecast.
You start with a set of accounts for a certain period of time and forecast what those accounts will look like towards the end of the financial year. This allows you to assess whether you’re on track with your business targets or not.
Don’t worry if you don’t have a corporate plan yet. The tax plan review can serve this purpose (for now).
- Step 2: Review your opportunities
Look at what you estimate in tax liabilities, and cash flow requirements.
Based on this you’ll be able to assess your ability to invest wherever you may see an opportunity. This doesn’t just have to be a tax deduction e.g. superannuation, it could be any investment.
The opportunity review is a mini plan that brings together your expectations with the actual position you are in.
- Step 3: Review your outcomes
Lastly you’ll want to review your business performance and assess if you’re achieving your goals.
Even if you’re not doing normal business planning this is a great way to force a performance review and compare targets and achieved results. Look back at your business performance and measure it against a forecast up until June 30th.
This review will reveal whether your business is on track or if it requires adjustments.
Our 3-step tax plan will give you a well-rounded picture of your current position, your abilities and your overall performance. It’s not rocket science, but just business as usual at this time of the year.
