Whether you’re an individual or a business owner, tax planning is an essential aspect of managing your finances.
Most people tend to think of tax planning as something you should do only during the tax season, but this could not be further from the truth.
By staying on top of your tax and financial obligations during the year, you can optimise your savings and cash flow, and avoid unnecessary financial stress.
We’ve compiled a list of just a few of the reasons why you should consider year-round tax planning:
1. Identify opportunities for tax savings
When you implement a tax planning strategy throughout the year, you give yourself the chance to identify potential opportunities for greater tax savings.
By staying aware of your financial situation and informed of changes in tax laws, you can take advantage of any tax deductions and credits that pop up during the year, that can help reduce your tax liability.
2. Avoid last-minute mistakes
Rushing to complete your tax return at the last minute is a recipe for making costly errors and forgetting to provide essential expenses and information that allow us to get you the best outcome for you or your business.
With adequate tax planning throughout the year, you’ll have more than enough time to ensure that you have all correct expenses and documents collated to avoid any potential errors in your tax returns. This will save you both time spent scrambling for this information and money lost on potential amendments or missed deductions.
3. Keep track of your income and expenses
Proper tax planning involves keeping track of your expenses, income and cash flow throughout the year.
Staying on top of and keeping accurate records of your income and outgoing expenses means both you and your accountant are more aware of what your financial position is when it comes time to lodge, especially if you are payable.
4. Make well informed financial decisions
When you stay on top your tax planning, you are able make better informed financial decisions throughout the year.
This means you’ll have a better understanding of how your choices during the financial year impact your tax outcome. This includes making strategic decisions around things like work-related purchases and donations, which are tax deductible.
5. Plan for the future
Effective tax planning throughout the year means forward planning. It’s setting you up to have a clear, straight forward and informed vision for your financial future. At BIS Cosgrove, we understand more than just numbers, we understand life.
By looking ahead, planning and strategising pre-emptively, setting goals and anticipating any potential changes to your financial situation, you can make adjustments to your tax strategy that will optimise your tax savings and keep you financially secure.
Tax planning year-round is crucial for anyone who wants to optimise their tax savings, better understand their entitlements and obligations, avoid mistakes and financial stress, and stay informed and on top of your financial position.
So don’t wait until tax season to start planning your taxes, get off on the front foot. Get in touch with us today and give yourself the best chance of financial success!