Top 10 Tax Mistakes

Top 10 Tax Mistakes

The end of the tax year is rapidly approaching. What a year it has been. It started strong, businesses doing well and some decent tax reform on the way. Then Covid-19 hit….you know the rest!

As year end approaches it is more important than ever to be ready. Small businesses need cash right now and an easy win is unlocking any tax refunds that they may be entitled to.

To get you off to a great started I’ve summarised the top ten tax deduction issues that I’ve dealt with over the last twelve months, either with my clients or in discussions with other accountants. It is by no means an exhaustive list but if you are ticking all the relevant boxes below you are off to a great start.

 

No receipts for expenses

It is a very commonly held myth that you can substantiate deductions with bank statements alone. This myth is in part due to the messaging from the modern cloud based accounting systems which push the idea that you can easily maintain all your records from automatic bank feeds.

There is no requirement to attached copies of the receipts to the data in your accounting system but you need to have them stored somewhere for the duration of the audit period (5 years). If you claim expenses that you cannot support they will be disallowed during an audit.

 

Unsubstantiated Travel Expenses

Most of us travel for business at some stage, it’s inevitable. Sometimes we’re even lucky enough that the business travel takes us to somewhere we wanted to visit anyway. This is where the deduction problem arises. Business owners attempting to claim 100% of the costs associated with a trip that was, at least in part, personal.

Any business owner who intends to claim the costs of a business trip must ensure they keep detailed records of all expenses (see point 1) as well as a travel diary or itinerary to show what they were doing during each day and how those activities related to their business. If you are going to a conference keep a copy of the program and any other documentation they give you with your other trip records.

The most important part of the whole process is to apportion the costs between business and personal. If you travel to Queenstown for a week long conference and you stay an extra week to go skiing you have to split all the costs. Yes, that includes the flights. The argument of “I had to fly over for the conference anyway whether I had the holiday after it or not” does not work..trust me, I’ve tried it during a live audit!

 

Motor Vehicle Costs – Logbooks

To use the logbook method for claiming motor vehicle costs you must keep records of all costs and have a valid logbook in place. The logbook must run for twelve uninterrupted weeks. Once completed, the logbook will last for 5 years assuming your business use of the vehicle does not change substantially.

The ATO have clarified their position on the form a logbook must take. It’s not generally acceptable to run an excel spreadsheet. You can use a spreadsheet for your calculations but the trip information must be supported by one of the following:

  1. Data export from a tracking app;
  2. Calendar or appointment books detailing the trips you took;
  3. A physical logbook purchased from a newsagent or other document provider. If you are using a logbook check the publication date. If the date on the book is after the first date shown for the logbook period you might get a few questions from the auditor.

Note: just because you are driving a Ute for work does not exempt you from the requirement to keep a logbook. The ATO has been known to frequent popular four wheel drive locations (like Fraser Island) documenting all of the vehicles covered in business logos and other sign writing being loaded on the barges. This data is then checked against the business’s tax return to see if a private use portion of motor vehicle costs has been reported.

 

Motor Vehicle Costs – cents per KM method

This is a big one. So many business owners use the cents per kilometre travelled approach to claim some cost of operating their personal vehicle as a business expense.

You cannot just make the number up.

While you do not need to keep a full logbook you are expected to show the ATO some support for your estimate. usually this would be a calendar or diary to support the trips/dates and some sort of evidence to show the distance travelled for that trip. I usually use google maps to support the distance for my trips.

 

Home Office Costs

Business owners often claim some part of their home/personal costs against their business income when they undertake business related activities from home. With all of the Covid-19 shutdown requires this year those costs are likely to rise considerably.

The nature of the expense you wish to claim will determine the approach to use. However, there is one part of the process that is often overlooked. To work out how much of the various costs you can claim as a deduction you must be able to provide some sort of evidence that you worked from home in the first place and for how long.

The easiest option is to keep some sort of work diary, even if it’s just a digital calendar. If you’re claiming that you worked from home for 8 hours a day, 5 days a week for 50 weeks in the year you should have a diary or calendar, prepared at the time the work was performed, to prove your claim.

 

Uniform Expenses

You cannot claim a deduction for the cost of clothing purchased for business unless the items purchased fall into one of three categories:

  1. The item has your business logo permanently attached;
  2. The item is consider occupation specific clothing – e.g. a Chef’s hat; or
  3. The item is protective equipment – e.g. Steel capped boots.

Clothing that is essentially the same as anyone else could wear on any given day is not deductible, even if you purchased it to wear while working.

There are some small exceptions to the above rule. For example, undercover police offices can claim the costs associated with purchasing plain clothes for work even though the items would normally be excluded. This exemption does invalidate the general rule. It’s a specific exemption granted for the police force. Just because you have to wear particular clothes for work (e.g a lawyer wearing a suit) does not make it deductible.

 

Laundry Expenses

To claim a deduction for the costs associated with cleaning your work clothing you first need to satisfy the previous point. No deduction is available for cleaning clothes unless you can establish that they are eligible work related clothing in the first place.

You can then determine the amount to claim as a deduction for laundry and cleaning costs. You will need a diary or other written evidence (receipts) if you wish to claim more than $150 for laundry costs in a given year.

Where the amount claimed is less than $150 you can make a reasonable estimate of your costs using the following rates:

  • $1 per load if the load is made up only of work-related clothing
  • 50c per load if you include other laundry items

You may be asked to demonstrate how often you wore your eligible clothing (eg. evidence that you worked four days a week for 48 weeks in the year).

 

Education costs

A really common mistake that I see all the time is failing to establish an adequate link between what your business does to generate income and education that the business owner undertakes. You need to carefully consider whether or not the course is directly related to the business’s services.

For example: Assume you run an IT business installing computer systems in office locations for small businesses. It is not reasonable to claim the costs associated with the owner undertaking a degree in computer programming, even though at first glance they both appear to be related to computers. The business does not build custom software applications for its clients, it installs hardware. The business may provide software development services in the future but right now it does not and the costs associated with the field of study are not an allowable deduction.

However, courses that improve your ability to run your business effectively are fine even if they do not necessarily relate the services your business provides to the world. For example, you can claim the costs of a social media marketing course against your business income even if the business does not sell Digital marketing services. The skills derived from the course will still be actively used in the running of the business.

 

Staff Bonuses

Your staff are doing a great job? You want to reward them with a little extra money as a once off bonus? Great! Just make sure you process it through your payroll system like any other component of their salary and wages. Payments made to staff in the form of salary and wages, which have not been treated as such in the accounting records are not deductible. You cannot transfer the money to their bank account and record a bonus expense (or similar) in your records. It has to go on the employee’s payment summary.

 

Staff Parties (Christmas, End of year etc)

This is another staff benefit that goes wrong more often than you would think. If your business pays the cost of staff entertainment this can be a Fringe Benefit. You can qualify for an exemption here but only if you satisfy both of the following points:

  • The cost per person is less than $300, and
  • The benefit is infrequent (it’s not something you provide regularly).

Business owners commonly stumble at point 2. If you have Friday afternoon drinks with the team every week we can all see that the benefit is not infrequent and, therefore, does not qualify for the exemption. However, the same rule applies where the event is something you do every year, like a Christmas Party. If you hold an event about the same time each year it is no longer infrequent even though it only happens once a year.

Make sure any costs that could fall into this trap are easy for your account to find in your accounting records. Do not hide them in some general or other expense account. Make sure they are coded to an entertainment account.

 

Next Steps

What should you do next?

  • Review the list above and determine which items apply to your situation; and
    • Start getting the information together ready for year end. It is only a few weeks away.
Tax Planning Tips – Prepay Expenses

Tax Planning Tips – Prepay Expenses

In this week’s tax planning article I’m going to cover prepaid expenses and the ability to bring forward tax deductions to reduce your current year tax bill.

Before I do it’s important to note that this particular strategy only works for businesses that are classified as Small Business Entities (SBE’s). In the 2018 financial year that is businesses with a gross turnover (total sales) of less than $10,000,000.

Should you Prepay expenses?

At first glance this may seem like a matter of robbing Peter to pay Paul. We are prepaying costs we would have otherwise paid next year in order to bring the deduction forward. Clearly, the result of that is higher expenses this year and lower expenses next year, right?

One point to note is that we operate our businesses in an environment that makes it impossible to fully predict future tax law changes. As a result, any strategy that can bring a deduction forward into a year we are certain about (lock in the benefit), rather than leaving it to the uncertainty of next year is potentially worth considering.

Another benefit of prepayments is that it often allows you to lock in this year’s prices before your supplies have set their yearly price increases. Note – while it is not tax deductible this is especially useful for Health Insurance!

How does this strategy work?

So, you have some cash available and you’re looking for a way to reduce this years tax bill without wasting money on things you don’t really need? Great position to be in!

Lets look at how prepaying an expense helps you achieve this!

Sample Information

Your business has made a profit of $150,000 for the current financial year before tax and owner’s pay. Well done! To make the example easy I’m going to assume that all of the profit is taxable in your hands, as an individual.

Option 1 – No prepayments

The whole business profit of $150,000 is paid to you as the business owners and you pay tax on the money at your normal marginal rates.
Based on current marginal tax rates you will pay $46,132.00 in tax (including Medicare levy).

Option 2 – Prepay $10,000 of expenses

In this example you take $10,000 in cash and use it prepay some tax deductible expenses that you otherwise would have paid next year. The remaining $140,000 of profit is paid to you as the business owners and you pay tax at your normal marginal rates.

Based on current marginal tax rates you will pay $42,232.00 in tax (including Medicare levy).

The net result is a $3,900 saving in total tax paid on your business profits for the year…but keep in mind you do have $10,000 less in your bank account.

Other Points to Notes

  • Assuming you have two almost identical years in business and the tax laws stay the same you could argue that this is not a tax saving. You have ‘deferred’ the tax until next year by bring the deductions forward into this year. Keep that in mind when you see accounting firms claiming that they have saved their clients $millions in tax for a particular year. I guarantee you most of it is just deferring tax to a later year.
  • If you inadvertently prepay expenses that are not tax deductible then the system doesn’t work!

What sort of items can you prepay?

The answer to that question depends very much on your business and the suppliers you have. Generally speaking you can look at items like:

• Office supplies and stationery;
• Insurance policies;
• Rent on your business premises;
• Lease payments on equipment and other assets;
• Interest on business/investment loans (make sure your loan agreement allows for interest prepayments); and
• Maintenance and service contracts – for example your accountant might allow you to prepay next year’s fees! ?

Profit First Australia

Clearly, for the sample strategy to play out as described you would need to have $10,000 of cash available to make the prepayments. If all your cash is gone then any tax planning advice I give you for the current year is almost useless.

This is where Profit First comes in. If you want to create a situation in which you can realistically take advantage of these sorts of opportunities you need to plan. My usual recommendation is to set aside some of your Operating Expenses money each week/fortnight/month in preparation for year end, bulk prepayments.

If you don’t currently use Profit First in your business you can learn more about the system here.

Next Steps

What should you do next?

• Look out for more tax planning tips in the coming weeks!
• Ensure you and your accountant are working towards a year end tax planning strategy, and
• If your accountant isn’t doing tax planning then contact us!

Tax Planning Tips – Personal Superannuation Contributions

Tax Planning Tips – Personal Superannuation Contributions

In a previous edition of this tax tips series I looked at the tax planning benefits of paying your employees superannuation contributions early. This time I’m focusing on your own, personal superannuation contributions.

…but before I do, a quick disclaimer!

**Superannuation is a financial product. As such only Individuals and businesses who hold an Australian Financial Services license or their authorised representatives can directly advise on the flow of funds in and out of your superannuation fund. My aim here is to provide general advice focused purely on the tax differences that can be achieved using superannuation tax rates.**

Ok, now that the legal nonsense is covered lets look at some tax savings!

How does this strategy work?

Superannuation is what we refer to as a ‘concessionally taxed environment’. What that means is that superfunds only pay 15% tax under normal circumstances even though they generate huge profits every year. The federal government allows them to enjoy this concession because they abide by a strict set of rules and in the long-term they take some of the strain off the welfare system.

As you would expect, tax accountants and financial planners look for opportunities to use this reduced tax rate to achieve favourable outcomes for their clients…or at least they should!

Lets look at how you can use superannuation to achieve a tax saving.

Sample Information – Scenario

Your business has made a profit of $150,000 for the current financial year before tax and owner’s pay. Well done! It’s now June 2018 and you are preparing your tax strategy for the 2018 year, which is about to end.

The current tax-deductible superannuation contribution limit is $25,000. You want to know the potential tax savings you can achieve by maxing out your super contributions for the year.

Option 1 – No Superannuation Contributions

The whole business profit of $150,000 is paid to you as the business owner and you pay tax on the money at your normal marginal rates.

Based on current marginal tax rates you will pay $46,132.00 in tax (including Medicare levy).

Option 2 – Contribute $25,000 to superannuation:

In this example $25,000 in cash will be contributed to your superannuation fund. The remaining $125,000 Profit is paid to you as the business owner and you pay tax at your normal marginal rates.

1. Based on current marginal tax rates you will pay $36,382.00 in tax (including Medicare levy) personally.
2. The superfund will pay $3,750 in tax on the $25,000 contribution you make (15%).

The total tax paid under this option is $40,132.00

The net result is a $6,000 saving on total tax paid on your business profits for the year.

Other Points to Note

  • While we have achieved a tax saving of $6,000 it is important to remember that the net superannuation contribution ($25,000 – $3,750) is trapped in your superfund under the normal rules. That is not necessarily a bad thing, just good to remember.
  • Tax is by no means the only thing you should consider when making the decision to contribute to superannuation. All the elements of your long term financial strategy should be considered. If you don’t have one it might be time to see a financial planner.
  • If you process yourself through the payroll module like your other employees then super contributions are already happening. The difference is these contributions are compulsory. During tax planning you will need to ensure that you adjust the year end contribution for any amounts you have put in during the year so that the total does not exceed $25,000.
  • The tax savings achieved through this system vary greatly depending on how much you earn each year. Taxpayers who earn more than $180,000 per year will see larger savings while those earning $50,000 a year in profit may see no savings at all. It’s important to run the numbers first!

Profit First Australia

Clearly, for the sample strategy to play out as described you would need to have $25,000 of cash available to contribute to superannuation. If all the cash is gone then any advice I give you is useless.

This is where Profit First comes in. If you want to create a situation in which you can realistically take advantage of these sorts of opportunities you need to plan and save. My usual recommendation is to set aside some of your owner’s pay each week/fortnight/month in preparation for year end. Then it’s just a matter of chatting with your Accountant and Financial planner before making the contribution.

If you don’t currently use Profit First in your business you can learn more about the system here.

Next Steps

What should you do next?

• Look out for more tax planning tips in the coming weeks!
• Ensure you and your accountant are working towards a year end tax planning strategy, and
• If your accountant isn’t doing tax planning then contact us!

Tax Planning Tips – Time Your Capital Gains

Tax Planning Tips – Time Your Capital Gains

Taking a smart approach to the sale of particular assets can have a big impact on the amount of tax you pay on the profit. In this week’s tax planning tip I’m looking at how Capital Gains Tax can be managed by carefully selecting the date on which you sell.

A bit of Capital Gains background information

When you sell a Capital Gains Tax asset (e.g. shares or an investment property) any profit you make on the sale of that asset is subject to tax. More specifically, Capital Gains Tax.

In Australia, individuals who hold their Capital Gain Tax assets for more than tweleve (12) months receive a 50% discount on the gain before we calculate the amount of tax payable.

Lets have a quick look at a sample Scenario and run the numbers.

Example – Scenario

You purchased a parcel of shares worth $100,000 on the 30 June 2017. During the 2018 financial year the ASX has seen significant gains and today (3rd May 2018) those shares are now worth $150,000. You are keen to sell out and pocket the profit….cha ching!

For simplicity, I’m going to assume that you have no other sources of income. The only taxable income you will have this year or next year is the sale of these shares. I will also ignore the effect of the low income tax offset.

Option 1 – Sell them today

You make a $50,000 profit on the sale of the shares. The whole $50,000 is taxable this year and must be reported in your 2018 tax return.

Based on the current marginal income tax rates you will pay $8,797.00 in tax for the 2018 year.

Option 2 – Hold the shares and sell after 30 June 2018

You still make a $50,000 profit on the sale of the shares (assuming the market remained stable). The difference here is that you’ve now held the shares for more than 12 months. After applying the 50% discount we now only pay tax on $25,000 when the gain is reported in next year’s tax return.

Based on the current marginal income tax rates you will pay $1,792.00 in tax for the 2019 year.

The net result is a $7,005.00 tax saving just by holding the shares for an extra 8 week before selling them.

Expanding on the example

Lets be honest, the example was incredibly simple. Rarely would anyone find themselves in a situation where they were looking to sell $150,000 parcel of shares while also having no other sources of income during two full financial years. In fact, that in itself is really the point of the article. During the tax planning process at the end of each year you will need to consider all the moving parts and determine how to achieve the best outcome for yourself overall.

  • If you were desperate for the money or expecting a considerable market downturn between today and 30 June 2018 you may choose to sell them early and tax the tax hit;
  • Should you have very little taxable income this year but you were starting a new, well paid job on 1 July 2018 you may find that the tax savings from holding the shares until next year fall considerably (or disappear completely);
  • If you have a lot of taxable income this year but are expecting a considerable drop next year that may be further motivation to wait.

Our aim is to be smart about the timing of Capital gains. We usually get to choose the day on which we sell our assets, so why not pick the one that works best? During my career I’ve had clients achieve 6-figure tax savings as a result of carefully timing the sale of particular assets.

What should you do next?

If you have any assets you’re looking to sell which may attract capital gains tax the best advice i can give you is to call your accountant. Chat through the pros and cons of selling now against holding until a future date. Especially at this time of year when you should already be engaged in tax planning discussions with them anyway.

Profit First and The Tax Reduction Myth

Profit First and The Tax Reduction Myth

It is tax planning season for Australian accountants. This is the period during which you should be meeting with your accountant to estimate your tax liability for this financial year and discuss any possible management strategies.

In the Profit First book Mike touches on his concerns around the advice many accountants give their clients during this process. Given that I completely agree with Mike’s points I thought I’d discuss the topic in more detail.

The core of the issue is the following statement:

 

I want to pay as little tax as possible.

Shouldn’t I run up expenses and buy assets so that I pay less tax?

 

This is one of the most widespread, damaging myths in money management. Find the oldest member of your family that has ever run a business and I can guarantee they either believe this to be true or have been advised to do this by accountants or other business owners.

Running up expenses just to reduce taxes is the same as spending ten dollars just to save three. It’s incredibly damaging to your business cashflow and, in most cases, only manages to waste seven dollars!

Your goal is to run the business as profitably as possible. That is your key to achieving financial freedom. You should work closely with your Profit First Professional to reduce your tax liabilities as much as you can without creating cashflow distress in the business.

Current Tax Planning Myths that perpetuate the problem

 

Myth 1: Buying assets to take advantage of the $30,000 instant asset right-off is good tax planning.

Currently, Australian small business owners can claim an immediate write off for assets with a purchase price of less than $30,000. On the face of it that sounds like an incredible opportunity to claim a very large tax deduction in the current year.

The problem is small business owners rarely plan for large asset purchases. This means that instead of having the cash available to buy the asset the business must take on debt.

So, while the business can claim a $30,000 deduction this year you are stuck paying off the loan, with interest, over the next 3-5 years. Overall the strategy ends up costing you more than any immediate tax you may have saved.

If your business desperately needs the asset and you were planning to buy it soon anyway then the strategy can work. Especially if you have the cash set aside to buy it. However, ideas like “you should update your work vehicle every two years because it’s good for tax” are just ridiculous.

 

Myth 2: Buying stock before the end of the year will reduce your tax bill.

At the end of each financial year businesses that carry stock need to do a stocktake. The aim of this process is to determine how much stock is being carried by the business. Comparing the stocktake numbers with your inventory system will allow you to see if any stock has been lost or stolen and update your system to accurately reflect the stock in your warehouse.

We insist that business owners do this for two main reasons:

1. To ensure that the financial data is accurate – Even if you don’t do regular stocktakes we can be sure that at least annually the levels are checked;

2. You’re closing stock value needs to be reported on your tax return. It reduces the total Cost of Goods Sold (COGS) figure we report to the tax office.

Why doesn’t buying stock help your tax bill? Because buying more stock just increases your closing stock value. Given that we can’t claim a tax deduction for closing stock all you’ve really done is lock up a lot of working capital (cash) in stock that you may not be able to sell for months.

 

Myth 3: Prepaying expenses is a great way to bring forward deductions

Many business expenses can be prepaid up to a year in advance. Depending on your situation you may be able to prepay business insurance policies, interest on loans, rent and a number of other expenses. Pre-paying expenses brings the deduction forward to the current year and reduces this year’s tax bill.

Just because you ‘can’ does not mean you ‘should’. The rule of thumb I use with my clients is as follows:

   You should consider pre-paying some business expenses if:

      1. You have the cash available to make the payment without creating cashflow distress;
      2. The vendor offers a significant discount for prepayments; and
      3. You expect next year’s business performance to be comparable to or weaker than the current year.

If the client’s answer is no to any of those three points I usually advice against making a prepayment.

 

Just “one more day”

I found the ‘Just one more day’ message in the Profit First book so useful that I’ve incorporated it into my tax planning discussion, even for clients who don’t use Profit First.

Generally speaking, Mike encourages you to look at all the major purchases you are considering. Before you make the purchase ask yourself “do I need it today or could I wait until tomorrow?”. If you could wait until tomorrow…wait!

You’ll be surprised how often ‘just one more day’ delays the purchase for over a year. If your business keeps going without experiencing any major inefficiency for a year without the item then you really didn’t need it.

 

The Tax Planning Golden Rule

Smart tax planning is crucial..but wasting money is crazy!

Work with your accountant to plan for large expenses. Accumulate money to pay in cash whenever possible and only buy when something is absolutely necessary. Deductions are great but cash is king!

 

Further Information

Read our comprehensive review of Profit First here

Join the Facebook group here

 

Tax Planning Tips – Pay Employee Superannuation early

Tax Planning Tips – Pay Employee Superannuation early

Paying your employee’s superannuation on time, in full, is essential. Especially now that the introduction of Superstream means that superannuation funds will report employers who fail to meet their payment obligations to the ATO.

What if I told you that making this payment early, rather than late, is actually a effective tax planning tool?

 

A bit of background information

Each time your employees come to work they accumulate a superannuation entitlement. The current rate for superannuation is 9.5%. Some employees don’t qualify for superannuation payments but for the purpose of this exercise I’m focus on those that do.

At the end of each financial quarter (e.g. July to September, or January to March) we need to pay this superannuation amount into the employee’s super fund.

These payments are due on the 28th day of the month after the quarter ends. For example superannuation that relates to the January to March quarter is due on the 28th of April.

What most business owners are not aware of is the fact that until the superannuation is paid it is not deductible and if you miss the payment deadline (the 28th) the amount is no longer deductible at all, even after you pay…but you still have to pay!

 

How does this strategy work?

Your employees superannuation payments for the April to June quarter are due on the 28th of July.

If we pay them on time they are not claimed as a deduction until next year because they were paid after 30 June.

If you paid $100,000 in wages during the March to June quarter that’s $9,500 of superannuation you’ll need to pay in July. This payment will be claimed as a deduction next year.

What if we brought the payment forward? Just one month? You’d get the tax deduction in this financial year. Assuming you are managing your business cashflow well the money should be set aside each time you process payroll. If the money is just sitting there, why not bring the deduction forward?

Assuming you pay an average of 30% tax the $9,500 payment, which you have to make in July anyway, would reduce this years tax bill by $2,850 if you paid in June!. That’s extra cash in your bank account now rather than after you lodge next years tax return.

 

Option 1 – No Tax Planning: Pay the $9,500 superannuation bill in July (next financial year):

You make the $9,500 Superanuation payment in July 2018.

The $2,850 Tax Deduction is received in September 2019, or later depending on when you lodge your tax return.

This means you don’t get the cashflow benefit of the payment for over 12 months after you pay it!

 

Option 2 – With Tax Planning: Pay the $9,500 superannuation bill in June (this financial year):

You make the $9,500 Superannuation payment in June 2018.

The $2,850 Tax Deduction is received in September 2018, or earlier depending on when you lodge your company tax return.

The net result is $2,850 of cash in your bank account 12-18 months faster just by making the superannuation payment 1 month early. I know a few $thousand here and there may not seem like much but this is an easy win and it’s just one of the tax planning options you should be exploring with your accountant at this time of year (April-June).

 

Other Points to Notes

1. You need to make your payment before business closes on 30 June. The funds must have left your bank account. Ideally, process the amounts at least 3 working days before 30 June.

2. Paying your superannuation obligations early might inadvertently push your employees over their contribution cap for the year and be detrimental to them. Currently your employees can contribute a maximum of $25,000 per year to their superannuation fund.

 

Profit First Australia

A common issue during Tax Planning is a lack of cash. All the great ideas in the world are useless if you don’t have the cash available to implement them. This is just one of the many reasons we recommend Profit First. If the system is up and running in your business the money required to implement this and many other tax planning strategies will have been accumulated through-out the year. When you reach year end it’s just a matter of chatting with your accountant and implementing the plan!

If you’re interested in getting your cashflow on track you can learn more about Profit First Australia here.

 

Next Steps

What should you do next?

  • Look out for more tax planning tips in the coming weeks!
  • Ensure you and your accountant are working towards a year end tax planning strategy, and
  • If your accountant isn’t doing tax planning then contact us!