Why 2026 Tax Planning Is So Important For Your Business
Tax planning for our business clients is the nuts and bolts of what we do. It involves going through your numbers from the financial year that was and getting strategic about how we approach your tax obligations. Tax planning becomes even more vital when we’re in turbulent economic times… and if Liberation Day has anything to say, you know where we’re headed.
Here are a few reasons why we tax plan with every business client at this time of year.
Top highlights
- Stay Ahead of Tax Law Changes: Proactive tax planning protects your business from last-minute surprises by adjusting early to evolving ATO regulations, trust rules, and compliance updates.
- Improve Cash Flow & Reduce Stress: Accurate forecasting of tax liabilities (like PAYG and GST) helps manage cash flow year-round, minimising financial pressure and improving business stability.
- Unlock Growth & Savings Opportunities: Strategic planning allows you to access R&D incentives, utilise small business concessions, and structure for succession, driving both tax savings and long-term growth.
1. Staying Ahead of Legislative Changes
One of the reasons we have jobs: tax legislation is fickle and forever changing. Staying on top of it is a job in itself. In recent years, we’ve seen increased scrutiny from the ATO, changes to trust legislation, expanded digital reporting obligations, and tighter regulations for deductions and fringe benefits. With these changes often rolled out with little lead time, proactive tax planning ensures you’re not caught off guard.
Key takeaway: By regularly reviewing your business structure and tax position, you can adjust early to legislative changes and avoid unwelcome surprises.
2. Cash Flow Management
Effective tax planning can significantly improve your cash flow – what keeps any business ticking. Planning ahead means you can forecast tax liabilities accurately, avoid last-minute scrambles, and ensure funds are available when needed. Whether it’s through quarterly PAYG instalments or managing GST obligations, knowing what’s coming helps you to operate in a smart way. Managing cash flow well is one of the key ways to address stress and anxiety as a business owner.
Tip: Xero does a lot of the hard work for you. If you’re not a client and you’re finding yourself here, start googling.
3. Identifying Growth Opportunities
Tax planning isn’t just about minimising tax – it’s about maximising opportunity. Smart structuring, leveraging R&D tax incentives, accessing small business concessions, and timing asset purchases can all improve your bottom line and free up capital to reinvest in growth (or accomplish whatever goals you have).
4. Succession, Exit, and Asset Protection
Thinking about selling, retiring, or passing on your business in the future? Tax planning plays a crucial role in succession and exit strategies. Without forward planning, you could miss out on valuable capital gains tax concessions or face avoidable tax bills that eat into your final payout.
Similarly, the right tax and legal structures can help protect personal assets from business risk–something increasingly important in today’s litigious world.
Takeaway: If exiting the business is in your near to medium term future, tax planning should be at the top of your priority list.
5. Sustainability and ESG Reporting
In 2026, more Australian businesses are embracing environmental, social, and governance (ESG) standards. Tax planning intersects with this through carbon tax implications, green investment incentives, and ESG-aligned grants. Integrating these into your broader financial strategy ensures you’re not only compliant, but also positioning your brand as responsible and future-focused.
We work closely with our partners, Trace, to offer clients Carbon Accounting services that take this to the next level.
6. Minimise Tax Liabilities
Tax planning is one of the most effective ways to minimise your business’s tax liabilities. In 2026, with ongoing changes to tax laws and a focus on corporate tax optimisation, having a strategic tax plan in place can help you identify deductions, credits, and opportunities for savings that you might otherwise miss. Whether it’s through smart tax deductions, salary packaging, or structuring your business more tax-efficiently, proactive planning allows you to reduce the amount of tax you owe and put that money back into growing your business.
Key takeaway: By implementing effective tax strategies, you can lower your business’s overall tax burden and enhance profitability while ensuring compliance with the latest regulations.
So what exactly is involved in tax planning sessions?
You’ve just read about all the reasons why, but what about the how? And the what? Here’s what you can expect in your tax planning session, and how we do it.
1. Review YTD Financials
- Profit & loss for the year so far
- Compare against the prior year and the budget
- Identify spikes in income or expenses
- Check for one-off items or timing issues
2. Estimate Tax Payable
- Forecast taxable income for the year
- Estimate tax liability (including company, trust, and/or individual)
- Factor in PAYG instalments paid to date
- Avoid nasty surprises and pre-empt cashflow impacts
3. Tax Minimisation Strategies
- Prepay expenses if appropriate (e.g. rent, subscriptions, insurance)
- Bring forward deductions (buy equipment, training, etc.)
- Delay invoicing or income if cash flow and rules allow
- Write off bad debts or obsolete stock
4. Super Contributions
- Maximise deductible super contributions (up to cap)
- Ensure super is paid by 30 June to get the deduction
- Talk about carry-forward unused concessional caps
- Consider employee bonuses paid into super
5. Trust Distribution Resolutions
- Prepare Trust minutes/resolutions before 30 June
- Plan distributions to beneficiaries tax-effectively
- Consider streaming capital gains or franked dividends
6. Division 7A and Loan Management
- Check any director/shareholder loan accounts
- Ensure loan agreements are in place
- Consider Div 7A repayments or declaring dividends
7. Review Asset Purchases & Depreciation
- Consider instant asset write-off thresholds
- Look at the timing of asset purchases
- Discuss depreciation methods and new equipment needs
8. Tax Losses & Offsets
- Utilise any carry-forward losses
- Plan around small business tax offsets or R&D tax incentives if applicable
9. Structure & Risk Review
- Review whether the current entity structure is still your best option
- Consider asset protection, family trust setup, etc.
- Succession planning or ownership changes?
10. General Business & Strategy Chat
- What’s happening in the business?
- Plans for growth, expansion, and staff changes?
- Pricing, margins, operational improvements
- Tech stack improvements (e.g. software, AI tools)
Key Changes in the 2026 Federal Budget That Affect Your Business Taxes
The 2026 Federal Budget brings several tax-related changes that Australian business owners should have on their radar. Updates to corporate tax rates, deductions, and business tax offsets could impact how you manage your tax position this financial year.
Notably, the budget includes adjustments to:
- Company tax rates for small and medium enterprises
- Eligibility criteria for business deductions (e.g. asset purchases, ESG investments)
- Tax incentives like the R&D offset and instant asset write-off
- ATO compliance focuses on trusts, Division 7A loans, and fringe benefits
The Role of Accounting Services in Effective Business Tax Planning
Accounting services play a pivotal role in guiding businesses through tax planning by providing expert advice and tailored strategies. In Australia, accountants can help you navigate complex tax regulations, identify potential deductions, and ensure you’re complying with the latest tax laws. Whether it’s adjusting your business structure or maximising available credits, accounting advisors work with you to create a tax strategy that aligns with your goals. By leveraging their expertise, you can optimise your tax position and avoid costly mistakes.
If you’re a client, you’re (hopefully) already booked in for a tax planning session. If you’re not part of the Future Fam yet but this has sparked your interest, give us a buzz: 1300 225 888.
