Tax Planning is the process of arranging your financial affairs in such a way to minimize your tax obligations. It involves making strategic decisions and taking actions to take advantage of tax incentives. The value in this is you minimise your tax exposure to ensure you retain more of your income and wealth.
The objective is to legally and ethically minimize you tax costs.
The three key aspects to tax planning are:
- Understanding the Tax laws. Tax laws are constantly changing and understanding them is essential to maximising your position, and at the same time, staying on the right side of the law.
- Optimising Tax Deductions. Identifying and claiming deductions and tax credits significantly reduces the amount of tax you need to pay.
- Choosing the Right Structure for your Business or Investment. Selecting the appropriate legal structure can have significant tax implications. Choosing the correct structure involves careful planning. Changing structures can have significant costs, so choosing carefully at the start is crucial.
It is important to note that tax planning must be done within the bounds of the law. Engaging in illegal or unethical tax practices carries significant consequences, including financial penalties and interest costs, and legal action. At Insight Accounting we can put a tax plan in place that keeps you on the right side of the law, and at the same time, keeps your tax costs to a minimum.
If you would like to discuss tax planning further, get in touch!