• The Farmers Accountant

Did you know you can get a tax estimate done prior to the end of the financial year?

The end of financial year is an important time.

The year flies on by and before you know it, it is coming to the end of the financial year. This is a critical time for looking at how the year has panned out for you financially and the resulting tax position. Once you have a fix on the profit (or loss), it is worth considering whether there are actions you should be taking to help things. After the 30th June, most elements of the income and expenses are set in cement and you cannot change them. So it is prudent to consider where you are going to land on this issue.

We find that there are many times that clients do not know how the profit stacks up until the numbers have been processed. They often think “The overdraft is roughly the same as the previous year so I have probably made a similar profit to the previous year”. Yet they forget that they might have paid down a loan, or may have sold some private shares, or perhaps purchased some equipment that needs to be depreciated. All of these things result in a change in the taxable income. Another common scenario is that clients think “It has been a lousy year, so tax should not be a problem”, yet they forget that they have sold down their livestock which has resulted in significant income in the year, despite the drought conditions for the year.   

Even when a loss on trading has been made, there are some things you can consider to help your situation as per the following:

  • Superannuation contributions.

  • The tax impact of selling shares in a year where there is a loss on trading.

  • If I take advantage of the instant asset write off by purchasing an item of plant under $30K, will that benefit me if I am making a loss on trading?

  • Should I be considering a restructure of my trading vehicle? (company, partnership, sole trader or trust).

  • How many farm management deposits should be recouped?

  • How do I stand with drought deferrals?

A small action at this time of year can make a significant benefit to you and it may be worth us having a look at your situation. If you have had a good year, you certainly need to consider how to minimise your tax. If you have had a loss year, there are still some potentially positive actions you can make to your benefit.

Funding Items To Remember

  • Drought Transport Subsidy – ends 30 June 2019 (Invoices need to be received by 30 September 2019).

  • Single Touch Payroll – Launches 1 July 2019 for employers employing less than 20 employees.

  • Emergency Water Infrastructure Rebate -  The scheme will close on 30 June 2021 or when the funding allocation is exhausted, whichever occurs first.

  • Drought Assistance Fund ($50K loan interest free) – No finalisation date at this stage.

  • Farm Household allowance. If you haven’t applied for this it may be worthwhile if your net farm assets are less than $5m and limited off farm assets. No finishing date on this.

Give us a call if you would like to discuss anything further.

(02) 6884 5542