There are many strategies that you can action to reduce your business annual tax bill. Timely tax planning will assist you in identifying which of those strategies will work best and have the lowest cost.
Effective tax planning generally requires a tailored solution as each business is unique, however here are five simple ways to reduce your tax:
1. Have the most suitable business structure. The business structure in which your business operates will often govern your ability to legally minimise tax. Having the ability to split genuine business or investment income is the best way to reduce tax. Consult with us at Platinum Accounting & Taxation to ensure that your business is operating in the most optimal business structure.
2. Utilise the various ‘small business entity concessions’. Small businesses may be eligible to access the range of income tax and capital gains tax (CGT) concessions available. These concessions can be very beneficial in reducing your tax liability.
3. Maximise your superannuation contributions. The superannuation contributions that you make to a complying superannuation fund are tax deductible (within your deductible limit) to your business. Superannuation contributions are also taxed concessionally within the superannuation fund. This strategy makes for a simple way to reduce business tax in the present whilst simultaneously investing in super for the future.
4. Invest in your business. Asset purchases, advertising, branding and other business building activities are tax deductible and hence reduce your business tax. This strategy will potentially assist in the growth of your business, ideally translating to increased future business profits.
5. Maintain accurate bookkeeping records. This may sound rather simplistic, but having correct, accurate and up-to-date books will enable you to better manage and financially gauge your business from a financial perspective. It also enables accurate tax planning so that critical tax planning strategies can be employed in a timely manner.
It goes without saying that you and your business will greatly benefit from the services of a professional accountant in reducing your business tax liability.
At Platinum Accounting & Taxation we are very proactive in assisting our business clients with legal tax planning and minimisation strategies. If you believe your business could benefit from our expertise please contact Platinum Accounting & Taxation on (03) 9746 6479.