Tax time. Just the mention of those two words is enough to send a shiver down the spine of even the most seasoned entrepreneur. But what if I told you that there's a different way to approach the tangled web of taxes?
What if I told you that - contrary to popular belief - there is no 'tax time'?
That's right – I'm here to challenge the notion that tax is something we only think about once a year. Instead, I invite you to shift your perspective and embrace tax as a lifelong aspect of your business journey. Because when we do, we open ourselves up to a world of opportunities and strategic advantages that can have a profound impact on our bottom line.
If you've ever found yourself feeling overwhelmed or daunted by the prospect of ‘tax time’, have no fear coz Liz is here! 🎺 I'm here to guide you through the maze and show you that there's a better way forward.
This isn't just another article about taxes. No, this is your roadmap to unlocking the full potential of your business by embracing tax as a lifelong companion. Because when you do, you'll discover a world of possibilities waiting to be explored.
Tax isn't just a once-a-year affair; it's a constant companion on your business journey. Like the steady rhythm of a drumbeat, it plays an integral role in shaping your financial decisions every step of the way.
That's why it's essential to maintain a vigilant awareness of your tax situation at all times. Whether you're brainstorming new business ideas or strategising for growth, tax considerations should always be top of mind.
It's also about seizing opportunities to leverage things like the legal, on-shore tax haven that is superannuation. These resources can be powerful tools for minimising tax liabilities and maximising financial security over the long term.
By staying ahead of the curve, you can turn tax from a headache into something you are confident in minimising in your business.
When it comes to tax, the entity structure of your business can make a world of difference. Why? Because company tax rates are often lower than individual tax rates, making it an astute option for many business owners.
Being in the appropriate entity structure is key. Are you a sole trader, or should you be operating as a company? It's a question that deserves careful consideration and a deep understanding of your unique circumstances.
For some, operating as a sole trader may be the right choice, offering simplicity and flexibility in their business affairs. But for others, transitioning to a company structure could unlock significant tax savings and provide added legal protection.
Your structure should not only be influenced by how you’re trading now but where you envisage your business in the future, even going so far as to imagine what it should look like when you’re ready to step away (and on to the next adventure!).
Knowing in which year to declare your income (or even knowing that is a thing in the first place!) can have a significant impact on your financial picture. But how do you know when the timing is right?
For example, if you anticipate a higher tax rate in the coming year, it may be advantageous to declare income in the current year to adjust your tax bracket. Conversely, if you expect a drop in income or tax rates in the near future, it may be wise to defer declaring income until later to capitalise on those savings.
But here's the thing – there's no one-size-fits-all answer. The best timing for declaring personal income will depend on a variety of factors, including your income level, tax bracket, and long-term financial goals. Also how you draw money from the business, and the kind of ‘labels’ you can apply to it, is a deep dive worth taking.
This is where that 1000ft view I talk about all the time starts to come in REAL handy!
Ever notice how tempting it can be to splash some cash when the end-of-financial-year (EOFY) sale ads start appearing? Sure, an EOFY bargain may sound enticing, but is it really in your best interest?
When you focus solely on tax implications at year-end, you run the risk of making decisions based on short-term gains rather than long-term strategy. Those flashy discounts and deductions may seem like a no brainer, but will they really improve your bottom line? Are they truly aligned with your business objectives?
Take a step back and consider the bigger picture. Is that EOFY purchase really necessary, or are you just being swayed by clever marketing tactics? Will it truly benefit your business in the long run, or could those funds be better allocated elsewhere?
By adopting a more holistic approach to tax planning – one that considers your overall financial goals and objectives – you can avoid falling prey to EOFY sales jargon. Instead of chasing short-term tax savings, focus on making decisions that support your business's growth and sustainability over the long term.
BONUS: by letting EOFY pass you by, you may actually pick up a better deal in a stocktake sale in the following months.
‘Tax’ is top of mind for more reasons than EOFY. On the one hand, new rates are being introduced to meet the rising cost of living. On the other hand, advocacy groups representing Aussie businesses are calling for reforms to mitigate the similarly rising costs of doing business.
Suffice to say, it's easy to get lost in the shuffle of new laws coming in and changes to old ones. But here's the thing: understanding the intended outcome behind tax legislation is key to staying ahead of the game.
Many business owners get fixated on the dollar figure without fully grasping the underlying concepts and how they apply to their business. It's like focusing on the tip of the iceberg while ignoring the vast expanse beneath the surface.
The kicker: tax law is a highly fluid space. What works/applies to you one year may not necessarily the next. That's why regular reviews and tweaks are essential.
Think of it like fine-tuning a musical instrument. With each adjustment, we ensure that your tax strategy remains in harmony with the ever-changing landscape of tax legislation.
It's time to stop feeling overwhelmed by the complexities of tax planning. NOW is the time instead to start making a game plan that lays the foundation for highly informed decisions and long-term success.
But I can hear you already: HOW in the HECK am I supposed to get my accountant to sit with me long enough to talk about all this?!
Glad you asked. 😉
This is one of the main reasons why I am an Accountant-turned-Financial-Mentor: there often isn’t the space to take these deep dives that could shape the future of your business in the best possible way. With my expertise and guidance, we can develop a holistic strategy that keeps your tax agent in the loop, whilst also being tailored to your unique business and vision (I can almost guarantee any accountant worth their salt will be thrilled to see you bring this to the table).
A Financial Power Hour would be the perfect way to get the ball rolling – your opportunity to delve into your financial data and uncover hidden opportunities for tax minimisation that can be implemented (in collaboration with your tax agent). Together, we can untangle the complexities of tax law, develop a long-term approach and ensure that your business is poised for success, year after year.
Don't let tax time dictate the fate of your business. Take control of your financial future and book your Financial Power Hour today. Your business - and your future self - will thank you for it.
| Disclaimer: These are yuck and boring but unfortunately a legal requirement for professionals in my industry. So just a reminder, the information contained here is general in nature and you should seek financial and business advice tailored to your own personal circumstances. Which, by no small coincidence, I can help you out with. Head over to my website and book a free 15 minute chat with me: https://betterbusinessdecisions.com.au/ |
