Tax Planning

Tax Planning Services

Tax planning is your legal right. As the ATO states: "You have the right to arrange your financial affairs to keep your tax to a minimum. This is often referred to as tax planning."

Tax Planning vs Tax Avoidance

The ATO distinguishes between:

• Tax Planning (Legal): Using legitimate methods to reduce tax, such as super contributions, business structuring, and timing income/expenses
• Tax Avoidance (Illegal): Artificial schemes designed to reduce tax that the ATO will challenge and penalise

Common Tax Planning Strategies

• Superannuation Contributions: Concessional (pre-tax) contributions up to $30,000/year (2024-25 cap)
• Business Structure Optimisation: Review whether sole trader, company, trust, or partnership is most tax-effective
• Timing Income and Expenses: Defer income or bring forward deductions between financial years
• Small Business Concessions: Access concessions if aggregated turnover is under $10 million
• Prepayments: Prepay expenses (up to 12 months) for immediate deduction
• Depreciation: Use instant asset write-off and accelerated depreciation
• CGT Strategies: Time asset sales to utilise the 50% CGT discount or capital losses

Who Benefits from Tax Planning?

• High-income earners looking to reduce marginal tax rates
• Business owners optimising structure and deductions
• Property investors maximising negative gearing benefits
• Professionals planning for retirement through super
• Families using trusts for income splitting

Source: ATO ??? Tax Schemes