For medical professionals in private practice, April to June is a critical time of year. This is tax planning season — when key financial decisions need to be made and implemented before 30 June.

Effective tax planning is not something that can be left until the last minute. Many strategies require time to assess, implement and, in some cases, to rectify outstanding compliance issues. Actions such as making additional superannuation contributions, deciding on trust distributions, or acquiring equipment for immediate asset write off must all be completed prior to 30 June if they are to deliver the intended tax benefits.

Engaging early with your accountant gives you the best chance to plan effectively, stay compliant, and maximise tax savings. Here is how to get the most out of that process.

1. Inform Your Accountant of Any Changes in Your Circumstances

Your accountant needs a complete and up-to-date understanding of your situation to provide tailored tax planning advice. If there are any actual or anticipated changes in your circumstances that are likely to impact your finances, inform your accountant as soon as possible.

Key changes to disclose include:

• Starting or expanding your private practice
• Change in the composition of your income
• Purchasing major equipment or upgrading rooms
• Hiring staff
• Buying or selling real-estate property
• Buying or selling major investments
• Taking on new loans or refinancing
• Family changes — marriage, divorce, welcoming a new child
• Planning business sale or retirement

By assessing your situation holistically, including your business and family circumstances, your accountant can identify opportunities and offer timely advice and assistance. The earlier you communicate these changes, the more options your accountant has to structure your affairs efficiently and avoid costly surprises.

2. Ensure Your Accounting Records Are Up-to-Date

Accurate and well-maintained financial records are essential for effective tax planning. Your accountant relies on your bookkeeping records to assess your current performance and forecast your income, tax and cash flow as part of the EOFY tax planning.

Beyond tax planning, well maintained records allow for better cash flow management, expense tracking, and performance analysis in real time throughout the year. If your practice is growing, well-organised records will help secure financing more easily, as lenders require a clear financial picture before approving loans.

If your bookkeeping isn’t up to standard, you need to take action! Consult with your accountant as early as possible in the tax planning season to discuss your options. Your accountant can recommend the most suitable and cost-effective solution that suits your practice’s size and complexity. Whether it’s upgrading the cloud-based accounting system, an in-house bookkeeper, or outsourcing to a trusted provider, clean records are non-negotiable for effective tax planning.

3. Don’t Limit the Discussion to Tax-Related Matters

While tax minimisation considerations are important, a full-service accounting firm can provide much more than just tax advice. Your accountant will work alongside with financial planners and other professionals to leverage their expertise.  Tax planning meetings provide a perfect opportunity to discuss broader financial goals and considerations, such as:

Reviewing your existing loan structure — Are you paying unnecessary interest? Is it time to refinance your existing loans? Can debt be restructured more efficiently?

Buying your family home or an investment property – How much can you borrow? What steps you can take to maximise your borrowing power?

Income protection and other personal insurance — Is your current cover still the most appropriate for your circumstances?

Investment and superannuation advice — Is it appropriate to maximise your retirement savings through concessional or non-concessional contributions? Should you consider setting up an SMSF to gain better control of your super?

By discussing these areas with your accountant, you can make informed decisions that extend beyond tax savings and contribute to long-term financial success.

4. Book Your Tax Planning Consultation Early

Tax planning strategies need time to be implemented. If you wait until the last minute to meet with your accountant, you may miss out on valuable tax-saving opportunities.

For example, if you want to take advantage of making personal superannuation contributions to reduce taxable income, doing so before the deadline is crucial. Similarly, if purchasing equipment for your practice qualifies for an instant asset write-off, you must buy and install the equipment before the year end.

Importantly, tax planning isn’t just about saving tax — sometimes it’s about fixing existing compliance issues before they become costly problems. Rectifying certain matters can take time, and leaving them to the last minute could limit your options or expose you to penalties.

Some examples of issues that often need time to address include:

Loans to shareholders (Division 7A loans) in private companies — which may need to be repaid or properly documented to avoid being treated as unfranked dividends.

Unpaid trust distributions to corporate beneficiaries — which may trigger unexpected tax consequences if not dealt with appropriately.

Capital gains tax, small business CGT concessions and rollovers – can be very complex and require a lot of planning, which sometimes spans over several tax years.

Setting up new entities or structures — such as service entities, investment trusts, “bucket” companies or SMSFs, which require proper planning, legal documentation, and registration lead times.

By booking your consultation early, you give yourself ample time to review recommendations and take necessary steps to implement before the deadlines.

5. Fully Understand the Recommended Strategies

Good tax planning is not about blindly trusting your accountant — it’s about understanding what you’re doing and why.

Accountants are notorious for using technical jargon when explaining tax strategies — and often for good reason. Tax law is complex, and accountants use precise language to avoid distorting the legal meaning of concepts. But the downside is that this language can make it difficult for non-accountants to fully understand what’s being recommended. Misinterpreting accountant’s advice can lead to disastrous results.

Don’t be afraid to ask questions. If a recommendation isn’t clear, ask your accountant to explain it in plain language, provide practical examples, or crunch the numbers with you. Some strategies have longer-term implications that you should fully understand. A good accountant will be more than happy to explain the rationale behind their advice and how it benefits your financial situation.

The more clarity you have, the more confident you’ll be in making decisions — and the better placed you’ll be to execute the strategy properly.