It’s never too early to start tax planning!
For many Australians, tax planning has long been a last-minute rush in May and June. As the end of the financial year approaches, business owners and individuals scramble to maximise deductions, reduce tax liabilities, and get their financial affairs in order. But waiting until the last minute often means missed opportunities, limited options, and unnecessary stress.
It’s time to shift the mindset—effective tax planning should be a year-round strategy, not just a pre-June panic.
Why tax planning should happen year round
More time, more options
When tax planning is left until the eleventh hour, choices become limited. Many strategies, such as contributing to superannuation, restructuring investments, or deferring income, require proactive decision-making. By planning throughout the year, you can take advantage of long-term opportunities rather than being forced into quick-fix solutions.
Cash flow benefits
Effective tax planning ensures that you have a clear picture of your tax obligations well in advance. This prevents financial strain from unexpected tax bills and allows for better budgeting. For businesses, this can mean improved cash flow management and fewer surprises when it comes time to lodge returns.
Maximising deductions
Keeping track of deductions throughout the year—such as work-related expenses, depreciable assets, or business costs—ensures nothing is overlooked. Maintaining accurate records on an ongoing basis means less chance of missing legitimate tax savings.
Superannuation contributions
Superannuation is a powerful tax planning tool, but contribution limits and rules can be complex. Planning early allows individuals and business owners to make strategic decisions about concessional and non-concessional contributions, ensuring they don’t miss opportunities to boost retirement savings while reducing taxable income.
Fringe Benefits Tax (FBT) and business structuring
For businesses, proactive planning ensures that FBT liabilities are managed effectively. The structure of your business—whether a sole trader, company, trust, or partnership—can have significant tax implications. Reviewing and adjusting your business structure throughout the year may provide tax advantages that wouldn’t be available at the last minute.
ATO compliance and risk reduction
The Australian Taxation Office (ATO) is increasingly focused on compliance and data matching. Proactive planning ensures that records are up to date, obligations are met, and risks of audits or penalties are minimised. Late or incorrect tax lodgements can attract interest charges and fines—planning ahead helps avoid these unnecessary costs.
How to make tax planning a year-round habit
Engage with your accountant early: Regular check-ins with your accountant or tax advisor ensure you’re on track and not leaving things too late.
Maintain good record-keeping: Use accounting software or cloud-based solutions to track expenses, income, and deductions.
Review business performance quarterly: Assess profitability, tax obligations, and opportunities for deductions well before the financial year-end.
Consider tax implications of major decisions: Before making significant financial or investment decisions, consult a tax professional to optimize outcomes.
Tax planning shouldn’t be a last-minute panic—it should be a strategic, ongoing process. By adopting a proactive approach, Australian individuals and businesses can reduce stress, improve cash flow, and maximise tax savings.
Get in touch with Yield Business Advisory today and break the cycle of May/June tax rush for good!