Tax planning for business owners: Five questions to ask your accountant

06 Aug Tax planning for business owners: Five questions to ask your accountant

Tax planning is not simply about finding deductions at the end of the financial year. Effective planning helps business owners understand their position, prepare for upcoming obligations and make informed decisions about cash flow, investment and growth.

Regular conversations with your accountant can also help prevent unwelcome surprises. The Australian Taxation Office recommends setting aside money for GST, PAYG withholding and superannuation rather than treating these amounts as available business funds.

Here are five important questions business owners commonly ask their accountant.

How much tax am I likely to pay?

This is often the first question, but an accurate answer depends on having current financial records.

Your accountant will generally review your year-to-date revenue, expenses, wages, asset purchases and other income. They may then estimate your taxable profit and expected tax liability.

This forecast can help you prepare for income tax, GST, PAYG instalments and employee obligations. PAYG instalments are regular prepayments towards the expected tax on business and investment income, helping to spread the obligation throughout the year.

Ask your accountant to provide an estimated tax position well before the payment deadline. Knowing what is coming allows you to protect cash flow and avoid spending money that will eventually be needed for tax.

What business expenses can I claim?

A business can generally claim expenses that are genuinely connected to earning assessable income. However, private expenses cannot be claimed, and costs that are partly private must usually be apportioned.

Common deductions may include rent, insurance, accounting fees, advertising, software, vehicle expenses, wages, interest and business-related travel. The timing and treatment of each expense can differ, particularly when equipment or other capital assets are involved.

Payments to workers may not be deductible unless the business has complied with its PAYG withholding and reporting obligations.

Rather than purchasing something simply to receive a deduction, ask whether the expense is commercially worthwhile. Spending one dollar to save a fraction of that amount in tax is rarely a sound strategy unless the purchase genuinely benefits the business.

Should I buy equipment or assets now?

Buying an asset before the end of a financial year may bring forward a deduction, but the relevant rules must be checked first.

For the 2025–26 financial year, eligible small businesses could use the $20,000 instant asset write-off for qualifying assets costing less than the threshold. The limit applied per asset, and the asset generally needed to be first used or installed ready for use within the relevant year.

Thresholds and eligibility rules can change, so speak with your accountant before committing to a purchase. Consider the effect on cash reserves, finance repayments, GST and future depreciation—not just the immediate tax deduction.

Is my business structure still appropriate?

The structure that suited your business when it began may not remain suitable as revenue, employees, assets and risks increase.

Sole traders, partnerships, companies and trusts have different taxation, reporting, legal and administrative consequences. For example, sole traders report business income through their individual tax return and pay tax at their applicable individual rate.

Ask your accountant whether your current structure still supports your goals. Changing structures can create costs and tax consequences, so the decision should normally involve both accounting and legal advice.

What should I do now to avoid future tax problems?

Good tax planning relies on accurate records, realistic forecasts and disciplined cash-flow management.

Ask whether your bookkeeping is current, whether PAYG instalments remain appropriate, and whether sufficient funds are being reserved for GST, tax and employee entitlements. Employers must also understand their superannuation obligations. From 1 July 2026, Payday Super requires eligible super guarantee contributions to be paid in line with salary and wage payments.

Tax planning should be an ongoing process rather than a rushed June exercise. Meeting with your accountant throughout the year gives you more time to consider legitimate strategies, correct problems and make decisions based on reliable information.

The most valuable question may simply be: “What should I be doing now?” With professional advice and forward planning, tax becomes a manageable business responsibility rather than an unexpected annual burden.

If this article has inspired you to think about your unique situation and, more importantly, what you and your family are going through right now, please get in touch with your advice professional.

This information does not consider any person’s objectives, financial situation, or needs. Before making a decision, you should consider whether it is appropriate in light of your particular objectives, financial situation, or needs.

(Feedsy Exclusive)