Money Doesn’t Come Without Guidance ...


Awesome Image

Government has recognised that farmers play an important role in contributing to the national economy and it has introduced an efficient tax system, which supports and facilitates the improving competitiveness of Australian agriculture. All wealth creating sectors of the community have a responsibility to contribute to public goods, services and infrastructure. Governments also have a responsibility to spend money wisely by establishing taxation mechanisms to deliver public services across the community. Taxation can be a very powerful mechanism to influence behaviour of the farmers that encourage positive outcomes for the economy, the environment and society.
There are a number of tax initiatives to help the farmers, regardless of their location or if they are in hardship that can be broadly classified as: tax offsets, tax deductions and tax concessions.

Tax offsets
Farmers can make a personal income tax return online and use these mechanisms to reduce their amount of tax payable, and therefore pay less tax.
The Carbon Farming Initiative: Farmers and land managers are provided the tax offsets to earn carbon credits by reducing greenhouse gas emissions and storing carbon in vegetation and soils.

Tax Deductions
These relate to expenses that directly facilitate earning income and reduce assessable income. These include:

Accelerated Depreciation: Australian Government announced some accelerated depreciation for water and fodder infrastructure and fencing for farmers. This allows farmers to claim deductions in their 2016 Online Tax Return over shorter timeframes, rather than the longer periods required under the general tax deduction rules.

Goods Taken from Stock: Any goods produced that are taken for your own private use needs to be shown as assessable income at the time when you file your tax return online.
Farm Management Deposits (FMD) any money deposited into a FMD is claimable as a deduction when you lodge tax return online in the year of the deposit up to a $400,000 limit alternatively any money withdrawn from a FMD will be included as assessable income in the year it is withdrawn.

Tax Concessions
These relate to a variety of assistance measures for farmers such as deferrals of tax liability that can help to reduce a farmer’s assessable income in the current financial year. These include:

Income Tax Averaging: The Australian Government has announced that, from 1 July 2016 farmers will be able to resume income tax averaging for 10 financial years after they have elected to exit the scheme, in recognition that business circumstances change over time. This initiative is part of the Australian Government's Agricultural Competitiveness White Paper, the government's plan for stronger farmers and a stronger economy.

Forced Disposal or Death of Livestock: You can elect to spread the profit from a forced disposal or death over five years, or to reduce the cost of replacement of livestock.

Comments 0

    Currently, there are no comment.

Login to comment

Latest Posts

Popular Post

We provide the fastest, easiest and most effective online tax return solution