The benefits of tax planning

Are you aware of how much tax you’ll have to pay at the end of the financial year? Tax planning prepares you and your finances for the upcoming tax due.

Tax planning is a process where we analyze your financial situation using your records to ensure that the right strategy is used so you can pay the lowest taxes possible at the end of the financial year.

During the tax planning, we will project the next 3 months before the end of each financial year in order to estimate how much tax you’ll have and give you ideas on what to do to reduce it.

What are the types of tax planning?

One type of tax planning is not applicable to everyone, that’s why we have listed some that is widely used:

1. Short-term tax planning is often performed towards the end of the financial year to legally lower the tax liability at the same time meeting the tax obligations.
2. Long-term tax planning is prepared at the beginning of the financial year and it focuses on the financial goals on an extended period. The effect may not be seen on the early stage but it is an effective plan in the long run.
3. Structural tax planning is a strategy used to minimise taxes by considering exemptions, deductions, and incentives that are currently available for you to use in reducing the tax obligations.
4. Strategic intergenerational tax planning focuses on maximising wealth transfer by selecting the right investments to ensure the desired outcome which is to minimise the effect of inheritance tax when it passes to your heirs.

What are the advantages of tax planning?

Tax planning addresses tax concerns of each entity and it is developed by considering each client’s goals and current financial position. Here are some benefits of tax planning that you can look forward to:

• Lower tax rate using the right strategies derived during the tax planning
• Having less taxable income by allocating the business income to reduce the overall tax payable
• Correct usage of tax credit to accommodate what has been discussed
• Control over your cash flow with accurate forecasting and budgeting
• Improved goal setting, tracking, and decision-making by using accurate financial data

We offer our Star Strategy to help you be confident with your decision-making and financial position. As the estimates and plans are dependent on the information you provide to us, we’ve prepared a checklist of the things you’ll be needing. Click here to download the checklist.