When discussing planning, particularly tax planning, many people would suggest that it’s something you need to consider when you have a ‘good’ year. However, planning for the end of the year – be that for tax efficiency, strategy reviews, or preparing for the upcoming year – isn’t something that is only beneficial if you have over-achieved.
This year has been a challenging one for many Australians. Fire wiped out huge areas of the country in the second half of 2019, and then the current global virus pandemic has had unprecedented impacts across all industries globally, and our way of life in general.
For many, that has meant a significant downturn in income; in operations – if not a complete cessation for some; and has often required wholesale changes in how we do what it is that we do.
This whirlwind of change can open windows of opportunity, which are well worth reviewing to ensure that even in a downturn, you can make the most of what you have.
The ‘usual’ strategies you or your business might employ may not be achievable or effective given the current circumstances. To ensure effective decision making, reviewing your position with your trusted advisers can highlight areas where opportunities exist. For some, it could mean unlocking profits in the form of dividends, which can be tax effective in a lower income environment. For others, it may mean holding off on superannuation contributions so they can be more effective in future income years.
The impacts of government stimulus varies amongst the stimulus packages as well – some are taxable income and others are not. The sheer amount of stimulus being made available can make a big difference to a business’ estimated bottom line. Making errors in calculation now can mean lost opportunities by June 30.
If you aren’t sure what strategies are available to you, or you want to make sure you are making the best of a not-so-good situation, please contact your Altitude Adviser.