The Top 5 Tax Planning Tips for Small Business Owners in 2023

This week, Oz shares five simple yet effective tax planning tips for small business owners. These tips cover important areas such as business structure, forecasting financial statements, timing of income and expenses, reviewing assets, and debtors.

Tip #1: Review Your Business Structure

As your business grows, it's crucial to assess if the current structure is still efficient enough to minimise tax and gain access to different tax rates. Talk to your accountant about whether a trust or company structure may be more suitable for your business.

Tip #2: Forecast and Budget Your Year-End Financial Statements

After completing the March BAS or nine months of trading, use your financial statements to predict where your business is heading. Based on these estimates, plan and strategise by deducting expenses and delaying income to minimise tax.

Tip #3: Time Your Income and Expenses

Timing is everything, especially when it comes to income and expenses. Complete superannuation contributions for employees, repairs, and prepaid expenses before June 30 to reduce your profit and loss and minimise tax. Pay bonuses to staff before June 30 to further reduce your profit and loss.

Tip #4: Review All Assets

Review your assets and write off old ones or acquire new ones before June 30 to benefit from the Small Business accelerated depreciation right off. Keep track of the limits for different financial years, as they can change.

Tip #5: Review Your Debtors

Identify and review old debtors that haven't paid their dues for over 12 months. You can potentially write them off as bad debts, reducing your profit and loss and minimising tax.

Remember to reassess these tips with your accountant each year as they may change depending on ATO rules. By implementing these tips, you can maximise your tax benefits and improve your business's financial performance.

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