Key points
- Tax planning is legal: it means paying the tax you owe, and not a dollar more.
- The work happens across the whole financial year, not in the week before the return is due.
- Most of the useful levers have to be pulled before 30 June to count.
- The company tax rate is 25% for a base rate entity and 30% for others.
- Personal deductible super contributions for individuals are capped at $32,500 for 2026-27.
Tax is rarely anyone’s favourite subject, but planning for it is one of the clearest ways to keep more of what your business earns. Tax planning is a strategic approach to your financial affairs aimed at legally reducing what you owe. You plan ahead, use the deductions, credits and concessions you’re entitled to, and stop overpaying by default.
The difference between planning and just lodging a return is timing. A return records what already happened. A plan changes what happens, while there’s still time to act. That is why the businesses that pay the least tax, legally, are the ones that look at the numbers in March and April, not the ones that hand a shoebox to the accountant in October.
What tax planning does for you
Done well, planning shows up in five places across the business.
- It lifts your profit. Using the incentives, deductions and concessions you qualify for lowers the annual tax bill and leaves more at the bottom line.
- It frees up cash. Every dollar not paid in tax, or paid later rather than sooner, is a dollar of working capital you keep in the business.
- It keeps you compliant. Planning ahead means obligations are met on time and in full, which cuts the risk of penalties, interest and ATO attention.
- It funds growth. Money saved on tax can be redirected into equipment, hiring or the next stage of the business rather than sent to the ATO.
- It sharpens your edge. Lower operating costs give you room to move on pricing and reinvestment that competitors carrying a heavier tax load don’t have.
The levers that matter
Tax planning is not one decision. It’s a set of levers, most of which have a deadline attached. The main ones for a typical business:
| Lever | What it does |
|---|---|
| Timing income and deductions | Bring deductible spending into this year, or defer income to next, across the 30 June line |
| Prepaying expenses | Small businesses can often claim up to 12 months of a prepaid expense now |
| Asset purchases and depreciation | Claim eligible asset costs under the small business depreciation rules that apply for the year |
| Super for business owners | Deductible personal or employer contributions, up to the $32,500 concessional cap for 2026-27 |
| Trust distributions | Valid distribution resolutions must be documented before 30 June |
| Structure and tax rate | The right business structure affects whether profits are taxed at 25%, 30% or your marginal rate |
| PAYG instalments | Aligning instalments to actual profit stops you overpaying tax through the year |
Not every lever suits every business, and pulling the wrong one can cost more than it saves. Prepaying an expense you didn’t need, or buying an asset for the deduction rather than the business, is a false economy. The value is in choosing the two or three that fit your numbers.
Timing runs the whole year
The single biggest mistake is leaving it too late. Most of the levers above only work before 30 June, and some need weeks of lead time. A trust resolution has to be signed before year end. A super contribution has to be received by the fund, not just sent, before the cut-off. An asset generally has to be installed and ready for use, not merely ordered.
One common rhythm is a planning review in the last quarter, around April or May, once the year’s profit is clear enough to model but there’s still time to act. That isn’t the only approach. Planning early in the new financial year has its own advantages, because it gives you the full twelve months to act rather than a few weeks. And for many businesses the best approach is an ongoing one, revisited across the year as profit, cashflow and circumstances change. Whichever suits you, the review looks at expected profit, the levers available, and the cash position, then sets out what to do before 30 June and what to prepare for the next year. For growing businesses, it also feeds into business advisory decisions like investment timing and drawings.
How AGS helps
Getting strategic with tax has a direct effect on your profit, cashflow and stability. The catch is that the rules change often, the deadlines are firm, and the right levers depend entirely on your numbers. That is where an experienced adviser earns their fee several times over.
As your tax adviser, our accounting and business tax team looks ahead across the full financial year, finds the deductions and concessions you’re entitled to, and builds a plan you can act on before the deadlines close. We handle the planning, the compliance and the wider accounting together, so the strategy and the lodgement stay aligned.
If you’d like to keep more of what your business earns this year, book an initial discussion and we’ll talk through where the opportunities are for you.