You’re likely paying more tax than you need to if nobody discusses tax planning with you before 30 June, your business structure hasn’t been reviewed since you set it up, or your tax bill regularly comes as a surprise. Each of these means the work is being done after the year closes, when most legitimate savings are no longer available. A proactive accountant raises these questions with you during the year, without waiting to be asked.
The Signs Most Business Owners Miss
The clearest sign is timing. Prepaying deductible expenses, timing asset purchases, making concessional super contributions and deciding how profit is distributed all have to happen before 30 June. If your first contact with your accountant each year is when they prepare the return, those options have already gone.
The second sign is a structure that never changed. Many businesses start in one person’s name or as a simple company, and stay that way long after profits have grown. As profit rises, a different structure may change how income is taxed and who it can be paid to. It isn’t always the right move, but it should be reviewed as the business grows.
The third sign is the surprise bill. A large amount owing, or PAYG instalments that suddenly jump, usually means nobody projected your position during the year. A mid-year estimate of your tax turns that surprise into a plan you can act on.
A simple test is to ask your accountant three questions. Roughly what will my tax be this year? What can we still do before 30 June? When was my structure last reviewed? If the answers come back clear and specific, you’re probably in good hands. If they don’t, that’s worth paying attention to.
Wondering Where You Stand This Year?
If those questions don’t get clear answers, it may be a sign your business has outgrown its current arrangement. Read more about making the switch to a more proactive accountant and what proactive tax planning looks like, learn about MYC Partners Accountants, or speak with our team about a review of your position.
