Making tax less taxing – 5 last minute tips for end of financial year preparations

Views

Where has this year gone? It felt like harvest had only just finished before the next crop needed to go in the ground. Now, with sowing wrapping up, the end of financial year is literally only hours away. With all the operational challenges last season brought, you may feel like you’re approaching June 30 a little bit under prepared. Never fear, you’re not alone. BCG caught up with Rural Bank’s Regional Manager Agribusiness Wimmera and Mallee Greg Kuchel to get a list of his top five things to keep in mind when heading into the new financial year.

  1. If you haven’t spoken to your accountant already – do it now! Your accountant will be best placed to understand your previous and current farm business performance and assist you with how to best manage any tax implications
  2. Make sure you actually have a tax issue before making decisions. Depending on profitability in recent years, you may not need to pay as much tax as you think. Again, your accountant is your go-to for advice here.
  3. If you’re looking for options to minimise tax, you could consider pre-paying expenses, such as chemicals and urea, as an easy last-minute option. Deferring grain sales and any other relevant income until next financial year will also be of assistance in this instance.
  4. Farm Management Deposits (FMDs) are a hot topic leading into the end of financial year. Remember that new changes have been made which make looking after your FMD’s easier. This includes a doubling on the cap of FMD’s from $400 000 to $800 000. Again, talk to your accountant to develop a strategy for FMDs and superannuation.
  5. Don’t forget about instant asset write offs for equipment purchases under $20 000. Eligibility for this has increased from small businesses with a turnover of less than $2 million to less than $10 million. To claim this deduction, the asset will need to be used or installed for the 2016-2017 income year, so if you’re in the market for an air compressor or motorbike, today is the day to head to the shops!

Rural Bank staff will be attending the BCG Expo on 5 July. Come and chat to Senior Agribusiness Relationship Managers Scott Grover (Horsham) and Dustin Lovell (Swan Hill) for more information. BCG acknowledges the long-time support of Rural Finance as a BCG Gold Partner, and looks forward to continuing to work with Rural Bank as these two businesses come together under the one name.

The information contained in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Upcoming Events

Become a BCG Member

BCG exists for its members. Research and extension activities are designed to provide members with information and resources that will help them improve the productivity, profitability and sustainability of their farm businesses.

Improve your profitability

Receive the latest research, extension and event news direct to your inbox! For a limited time, receive a free technical bulletin when you subscribe.