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Are you a business owner feeling the weight of high marginal tax rates despite running a profitable enterprise? If so, it's time to consider incorporating your business and we can help ... Incorporation can provide significant tax benefits by allowing you to leave profits within the company, which are then taxed at a more moderate corporate tax rate of 25%.
The 25% corporate tax rate applies to businesses with an annual aggregated turnover below $50 million, as long as their passive income(such as rents, interests, dividends, etc.) does not exceed 80% of their assessable income. By incorporating your business, you can take advantage of this lower tax rate, allowing you to retain more of your hard-earned profits.
However, it's important to understand that incorporating your business involves navigating certain rules and regulations. The PersonalServices Income (PSI) rules, in particular, may impact how income is attributed to you as the business owner. If your company provides personal services and does not meet the required results, 80%, unrelated clients, business premises, and/or employment tests, the income of the company could be attributed to you personally.
To ensure a smooth and successful incorporation process, it's crucial to work with experienced professionals like the team at AttuneAdvisory. Our experts have in-depth knowledge of the tax landscape and can guide you through the complexities of incorporation, ensuring that you maximise the tax benefits available to your business.
By incorporating your business, you not only unlock the potential for lower tax rates but also gain access to a range of other advantages. These include increased credibility and professionalism, limited liability protection, potential access to more favourable financing options, and enhanced opportunities for business growth and expansion.
At Attune Advisory, we pride ourselves on providing strategic, tailored solutions that meet the unique needs of each business we work with. Our team will carefully analyse your situation, taking into account factors such as your business structure, industry, and growth plans. We'll then develop a comprehensive incorporation strategy that aligns with your goals, ensuring you reap the maximum tax benefits while remaining compliant with relevant regulations.
As you contemplate the advantages of incorporating your business, we recommend consulting the Australian Taxation Office (ATO) website for additional information. The ATO website provides valuable resources on individual income tax rates, including details on the 25% corporate tax rate and the conditions that must be met to qualify for this rate.
Don't let high marginal tax rates hinder the growth and profitability of your business. Take the first step towards tax optimisation and financial success by incorporating your business with Attune Advisory. Our team of seasoned professionals is here to guide you through the process, ensuring you unlock the tax benefits you deserve. Call the team today on 1300 866 113 or send us an email to schedule a consultation and let us help you navigate the path to amore tax-efficient future for your business.
