Tax planning

The golden rules of tax planning

Taxation is a critical component of financial management. GST, income tax, capital gains tax, rates and other taxes are charges from government on individuals and businesses for public services. They have to be paid, but how much you pay depends on how well you work the system.  

Tax planning involves accurately estimating your income and expenditure to the end of the financial year, understanding your estimated tax position, and putting in place appropriate strategies to better manage your tax. A well-developed tax plan  ensure you pay only pay what you have to pay. 

The financial counsellors at the Rural Financial Counselling Service NSW  are well experienced at helping people understand and take control of their finances. Counsellors are not taxation experts and can not provide taxation advice but they highlight through their case management model, tax requirements, issues, opportunities and options.

The top tips for tax planning from RFCS NSW are:

  1. Always talk to professionals: Engaging with tax professionals ensures that you benefit from expert knowledge and are up to date with information on tax planning and compliance. Professionals can offer tailored advice, identify tax-saving opportunities and assist in making informed business decisions.  
  2.  The earlier you start the better: Commencing tax planning early in the financial year allows you and your accountants to proactively manage finances and implement strategies effectively. Waiting until the last minute may overwhelm accountants during peak periods.  
  3. Consider some of the big issues: While having a tax professional on your side is imperative, their knowledge is only as good as the information you give them. To get the most from your working relationship, it is important that you know your business inside and out and spend some time considering some of the conversations and issues you are likely to discuss during the planning process, including:
  • Bringing forward or delaying income and expenses to pre or post-30 June
  • Trust distributions and the effects on beneficiaries
  • Review of farm management deposits
  • Superannuation planning/contributions
  • Major capital purchases
  • Debt reduction
  • Changes in off-farm income
  • Impact of accumulated losses
  • Impact of deferred income/forced sales
  • Review of averaging position.

RFCS NSW can guide you through your preparation work, analyse  your financial circumstances and develop an action plan to help you improve your tax position and profitability.

The Rural Financial Counselling Service Program is funded by the Australian Government and the New South Wales Government and is administered by the Department of Agriculture, Fisheries and Forestry