There are many tax accountants/tax agents but is tax preparation the same as tax planning? Absolutely not! Most individuals and small business owners see their accountant once a year……after 30 June!! What they get is simple tax preparation which is the process of compiling, preparing, and lodging tax forms, but what they really need is tax planning which involves the proactive design of tax reduction strategies customised to the client’s individual situation. A real accountant will be on the phone to you before the financial year end to discuss how the year has gone and discuss how your tax situation may be improved……Proactively, NOT Reactively!!
Tax planning is more time consuming, requires a higher level of engagement with the client, which many traditional accountants and the ever emerging online cheap as chips tax preparers see as a drain on their internal resources (and profit margins). As a result, individual tax payers and small business owners remain in the dark without any tangible plan intended to help them be as tax efficient as possible.
Tax Planning involves finding deductions that are often overlooked or tax strategies often never even mentioned by the traditional tax accountant. N Cook & Associates believe in proactive tax and accounting advice that goes beyond the process of filing tax returns accurately and efficiently.
As part of our service, N Cook & Associates provide clients with the opportunity to have a tax plan completed each financial year. Tax plans are usually conducted between March and June each year and involve reviewing your information for the financial year to date, estimating income and expenses for the remainder of the financial year and making recommendations on ways you can legally minimise your tax obligations.
By way of example, tax planning may involve the following recommendations:
- Deferring income where possible
- Reviewing income received for any income received in advance
- Bringing forward expenditure that will be incurred in the foreseeable future
- Utilising Government incentives (e.g. $20k Small Business Write Off)
- Effective use of both income tax losses and capital losses
- Negative gearing opportunities
- Salary sacrificing opportunities
- Expense prepayments e.g. rent, insurance, interest
- Assessment of tax benefits of fixed asset acquisitions
- Investment/Asset structuring advice – e.g. are investments such as term deposits, shares held in the lower income-earning spouse’s name to take advantage of his/her lower marginal tax rate?
If you would like to have a discussion with a proactive Chartered Accountant about how your tax situation may be improved before year end please get in touch – we would love to work with you. firstname.lastname@example.org or 0416528902.