5 Reasons Why Tax Planning is Important For Your Business

Tax planning is essential to ensure everything is covered when preparing your taxes. It can help you achieve your business goals and objectives, save money on accountant fees, reduce tax liability, and make life easier for you and your accountant!

1. You can reduce your tax liability

You have the right to arrange your financial affairs to keep your tax to a minimum. This is often referred to as tax planning, or tax-effective investing. Tax planning is a way of making sure you are paying less tax. There are many ways that tax planning can help your business, but here are five of the most common:

• Identifying legal deductions and credits
• Making sure all payments made by the company are deductible in whole or part (e.g., wages)
• Understanding how much tax will be paid on various types of income from different sources so that it can be applied at the right point in time (e.g., dividends vs. interest earned)

2. It’s an excellent way to save money on accountant fees

Tax planning is a great way to save money on accountant fees. If you’re self-employed and have no employees, then it’s likely that your business doesn’t generate any income tax liability at all. However, if you do have employees or other sources of taxable income (like rental property), preparing an accurate return can be tricky–especially if it’s difficult for anyone else in the office!

Hiring an accountant will cost you thousands of dollars yearly in accounting fees alone (not counting other costs). By taking charge of some or all of this work yourself instead, though–especially if they’re already familiar with how things work in your industry–you’ll be able to save yourself thousands over time too!

3. It helps you become more profitable.

Tax planning is essential because it helps you become more profitable. Taxes are a significant expense, and if you don’t plan for them, they can cost your business more than it should.

For example: If you have employees who work overtime at their regular rate of pay and then reimburse themselves for the expenses incurred during their shift (e.g., gas), make sure that this information is recorded properly so that the ATO knows how much was spent on each person’s commute home from work that day.

If everything goes according to plan – and assuming there aren’t any recording errors – you can claim an offsetting deduction against whatever employee salaries are paid out each month (or quarter).

4. Your tax return will be simpler and easier to file, so it will take less time to prepare.

Tax planning is essential because it can help avoid penalties, interest charges, and other costs of filing a late return. If you’re expecting an audit in the future, tax planning will also help you avoid paying more taxes than necessary because of mistakes on your returns.

Tax planning also makes it easier to prepare your business’ tax return by making sure all of the information needed for each item has been included in one place so that there are fewer errors or omissions when it comes time for submitting them.

5. Tax planning is essential to ensure everything is covered when preparing your taxes.

Tax planning is essential to ensure everything is covered when preparing your taxes. It can help you save money on accountant fees, make your tax return simpler and easier to prepare, and even increase profits for your business.

Tax planning is a way to help you achieve your business goals, objectives, and personal aims. Tax planning can also help your business achieve its mission statement.

Tax planning is essential because it helps you:

• Stay in compliance with tax laws and regulations
• Avoid penalties and interest charges associated with being late filing or paying taxes on time
• Reduce the amount of taxes owed by using legitimate tax deductions for which there are no limitations

Conclusion

If you need help putting all this together, don’t worry! At Tradies Advantage, we offer a free Ebook you can download. Get your copy of the Tradie’s Guide to Paying Less Tax and Making More Money here. It’s an excellent way for you to see whether or not you’re on the right track with your tax planning efforts. So if you’ve got any questions about taxes or want advice on how best to handle them, consider to reach out today!

Please Note: Many of the comments in this article are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.