Why 2025 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.

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 2025, 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.

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 prior year and 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 cashflow 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 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 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 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, staff changes?
Pricing, margins, operational improvements
Tech stack improvements (e.g. software, AI tools)

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.