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Wealth, Strategy - 5 min read

Financial surprises can be wonderful (an unexpected bonus!) or they can be terrible (having to budget for unexpected expenses just before tax time). Life, and business, is full of these ups and downs, but we firmly believe that you shouldn’t have to deal with financial surprises when it comes to your taxes.

That’s why we prefer to talk about Tax Planning, or Annual Planning rather than tax filing. When you plan your taxes well ahead of time, you can make adjustments early on in the year that will lower your tax burden and leave you pleasantly ‘unsurprised’ when it comes to tax time.

As you’re taking the time to focus on your taxes, use this as a time to think about your overall financial wellbeing, rather than just tax optimisation

In this post, we’ve put together a tax planning checklist to help you ensure you have no surprises come tax time, and achieve your goals moving forward.

Review the Previous Year

What worked well for you in the past year? What financial decisions do you wish you had made differently? Is your financial situation still aligned with your overall personal or business vision? By reviewing the past year, you can make informed and intentional decisions that will improve your situation in the coming year. As you review, ask yourself the following questions:

  • In the past year have you had any changes in your personal financial world?
  • Has your business increased or decreased in size and/or revenue?
  • Have you taken on any new loans or other debts?
  • Have you gained or lost any assets?

Revisit Your Goals

If you created financial or tax-related goals last year, this is a good time to revisit those. Did you achieve your goals? If not, consider the obstacles you faced that prevented you from achieving them.

When you consider last year’s goals, do you feel like they still fit your priorities? If not, consider how you want to change your goals for the upcoming year to fit your priorities now.

Revisit Your Cash Flow

Consistent cash flow makes it easy for you to plan your taxes before June 30 and focus on your business or personal finances. If you’ve faced cash flow problems in the past year, think about what you can do to fix them. Maybe you need to shorten payment periods or consolidate loan payments. Do what you can to establish an orderly cash flow; this will help with your tax planning. Even budgeting out a month by month calendar of your cash/tax obligations can be extremely helpful.

Evaluate Your Performance in Regards to Your Goals

Financial goals are most helpful when they’re accompanied by concrete figures and dates. How did you do with your tax planning goals for last year? Did you meet your goals? Were you able to pay your taxes on time and avoid fines?

 While you’re looking at your taxes, evaluate your other financial goals as well. Are you staying on track with your super contributions? If you had a goal to reduce your debt load, were you able to meet your goal?

Review Your Risk Management and Protections

When you’re reviewing your taxes before June 30, it’s also wise to review your risk management and protections. Check out your insurance to make sure it still meets your needs and is relevant to you or your business. Review your will, beneficiary nominations and estate planning mechanisms. If you have bought or inherited any additional assets in the past year, consider how they’ll need to be incorporated into your tax planning, your insurance and your will.

Also, consider using tax strategies such as writing off eligible business assets, delaying income until after June 30, paying your super contributions before the start of the financial year and finalising employee bonuses before the end of the financial year.

Ask Yourself Whether You Feel Secure and On Track

When you take some time each year to review your tax planning checklist, you can know whether or not you’re still on track to meet your financial goals. You’ll have peace of mind knowing that you’re headed in the direction you want to go.

Tax can be a large expense for yourself or your business. Ensure you’re ready for it, but also take the time to reassess your overall financial wellbeing.

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