The least useful tax planning question is often, “What can I buy before Friday?” It usually arrives near 30 June, when there is little time to check whether the purchase makes commercial sense or even qualifies for the expected deduction.
A better conversation starts earlier: what profit is the business likely to make, how much tax has already been provided for, and which decisions genuinely need to be made before year end?
This article looks ahead to the year ending 30 June 2027, with guidance reviewed on 8 September 2026. Rates, concessions and proposed measures should be checked again when a transaction is being considered.
Build the estimate from reliable accounts
Start with reconciled year-to-date results, then forecast the remaining months. Separate recurring revenue from a one-off project. Include realistic wages, finance costs and commitments rather than assuming the next quarter will resemble the best month so far.
The accounting profit and taxable income will not always match. Ask your accountant to explain the main adjustments and show how instalments or withholding already paid affect the expected balance. A useful estimate gives you an amount to plan around and identifies the assumptions that could change it.
Refresh the forecast after a major contract, recruitment decision or change in trading conditions. By the time May arrives, you should be discussing options rather than discovering the year’s profitability for the first time.
A deduction still involves spending money
Illustrative example: Assume a business can claim an immediate $10,000 deduction and, purely for illustration, the relevant tax effect is 25%. The tax reduction would be $2,500, leaving a $7,500 after-tax cost before considering GST or finance. Spending $10,000 on something unnecessary has not made the business $2,500 better off.
Ask whether the purchase improves capacity, reliability or profitability. Then assess the deduction rules and cash timing. Equipment that saves staff hours might be a sensible investment; equipment bought only because a salesperson mentions a write-off needs a more careful look.
As at the review date, the ATO confirms that the permanent $20,000 instant asset write-off measure is law from 1 July 2026 for eligible small businesses with aggregated turnover below $10 million. The relevant asset threshold is less than $20,000, and eligibility and timing conditions still apply.
Do not assume that paying a deposit before June is enough. The asset’s first-use or installed-ready-for-use timing and the business-use portion matter. Consult the ATO’s operating guidance for eligible assets, including the treatment of assets outside the threshold.
Review money that customers may never pay
An overdue invoice is not automatically a bad debt. Review the debtor list, the collection history and the likelihood of recovery. Where a deduction may be available, the conditions include the treatment of the income and the steps taken to write the debt off.
The ATO explains those requirements in its bad debt guidance. Keep evidence of the assessment. A general provision in the accounts and an eligible tax deduction are not necessarily the same thing.
This review has a commercial purpose too. It can expose weak credit terms, slow invoicing or customers who repeatedly consume time without paying. Recovering cash is usually preferable to claiming a deduction for losing it.
Check payroll commitments and the owner’s position
Reconcile wages and superannuation records and identify unresolved payments or reporting issues. The ATO’s deduction guidance for wages and super should be read alongside the obligations applying when those amounts are paid.
Discuss personal super contributions separately if they form part of the owner’s plan. Current caps, eligibility, other contributions and notice requirements need checking. The ATO’s concessional cap guidance is the place to verify the applicable year, rather than copying a limit from an older article.
Also review owner withdrawals, related-party balances and any proposed dividends or structural changes. These decisions can involve deadlines and consequences beyond the estimated business tax bill.
Leave the meeting with decisions and dates
Your plan should record the estimated tax position, cash to reserve, actions agreed, documents required and who will complete each item. Give major decisions enough lead time for advice, financing and implementation.
If the business cannot comfortably fund tax already arising from its profits, focus on cash collection and drawings before optional spending. Good planning should improve your understanding of the year ahead and protect the business’s ability to operate. A smaller tax bill is useful when the decisions behind it still make sense on 1 July.
Target Advisory 