What is Tax Planning?
Do you want to minimise your taxes and keep more of your hard-earned income to yourself? Tax planning is the way to achieve it! Tax planning is not just for high-income individuals or business owners. Anyone should be able to minimise their taxes to their benefit. There are various tools and techniques to reduce tax liabilities. By engaging a professional tax planner, you can also enhance the contributions to your retirement plans which is critical for a successful financial life.
Here is everything you should know about tax planning and how it can benefit you.
Tax planning is analysing your finances from a tax perspective to achieve tax efficiency. Tax planning aims to reduce tax liabilities using tax exemption rules, tax rebates, and benefits to your profit. A professional tax planner can help you legally avail the maximum benefit using beneficial provisions under tax laws and minimising tax incidence. It may also include making some personal and business-related financial decisions.
What are the types of tax planning?
Tax planning can be classified into three categories-
#1- Permissive tax planning: Tax planning involves adhering to the taxation laws within the country to reduce your tax liability for the financial year.
#2- Purposive tax planning: When you create a tax plan for a particular objective.
#3- Short and long-range tax planning: Specific and targeted planning executed towards the beginning and the end of the financial year.
What are the considerations that come under tax planning?
Tax planning includes various considerations, including size, the timing of income, the timing of purchases, and different kinds of expenditures a person may be involved in. It also ensures that the chosen investment and retirement plans align with each other, the tax filing status, and the deductions to get the most profitable results.
Why should you consider tax planning?
Tax planning should be a vital part of your financial roadmap to achieve your dreams and goals on a personal and business level. The lesser financial burden you have from your tax liabilities, the more you can contribute to your investments. Here are some reasons you should consider tax planning-
- to reduce tax liability
- to aid in productive investment
- to create economic stability.
About Sphere Accountants & Advisors-
If you are seeking advice on protecting your assets, your search ends with Sphere Accountants and Advisors. Through working with Sphere Accountants and Advisors, we consider the complete picture and continually look for ways to improve your financial situation to create, protect and grow your wealth. We apply this approach whether you come as an individual or a business. With a breadth of expertise spanning all aspects of taxation, accounting, financial planning and more, we can offer a complete solution for all your financial needs. Our services include accounting and taxation, advisors, financial planning, lending and finance, bookkeeping, and self-managed super fund. The Sphere Group is also CA and CPA Accredited. Visit our website, call us at (03) 8899 6399, or email us for more details.
