Key tax planning considerations

Planning is not avoidance

Tax planning sometimes gets an undeserved reputation. Arranging your affairs so you do not pay more tax than the law requires is entirely legitimate — the ATO itself distinguishes clearly between sensible planning and artificial schemes. The rule of thumb is simple: if an arrangement only makes sense because of the tax outcome, be wary. If it makes commercial sense and is tax-effective, that is just good management.

Timing: the simplest lever

Much of tax planning comes down to timing. Income is generally taxed in the year it is derived, and expenses are generally deductible in the year they are incurred. Around 30 June, small shifts in timing can move income or deductions from one year into another.

Whether that helps depends on your circumstances — your expected income this year versus next, changes to tax rates or thresholds, and your cash position. This is exactly the conversation to have with your accountant in the final quarter of the financial year, not the first week of July.

The levers worth reviewing each year

The details change with your situation and with the rules, but the same areas repay an annual look.

• Superannuation contributions

  Concessional contributions are one of the most straightforward tax-effective strategies available, subject to the caps that apply to you. Timing matters — a contribution counts when the fund receives it, not when you send it.

• Asset purchases and depreciation

  If equipment is genuinely needed, the timing of the purchase can affect which year the deduction lands in. The rules in this area change often, so check the current settings before acting.

• Debtors, stock and write-offs

  Reviewing bad debts and obsolete stock before 30 June — and writing off what is genuinely irrecoverable — ensures deductions are claimed in the right year.

• Structure and distributions

  For trusts and companies, decisions about distributions and dividends need to be made and documented before year end. Left too late, options narrow quickly.

Records make it all possible

None of these strategies work without substantiation. Deductions need records; trust distributions need resolutions; super contributions need to actually reach the fund in time. Good records are not the boring part of tax planning — they are what makes the rest of it stick.