Explained: How to prepay expenses this financial year to benefit your business

Tax planning is a vitally important, but often neglected task to complete with your tax accountant towards the end of the financial year for all small business owners in Australia.

In a nutshell, you should estimate your taxable income, determine any dividends or trust distributions (if trading through a company or trust), what should you do to reduce your tax and work out if you have a payable or refund to determine if you should lodge as soon as possible or defer to lodge and pay on the due date.

If you had a profitable year this financial year, but think that next year will not be as profitable, it is worth considering paying for next year’s expenses prior to June 30, 2022.

This is known as prepaying expenses.