Top 5 Tax Planning Tips

Farmer in field

With the improvement in prices, seasons, and low interest rates, cash flow is looking really good for farmers this year. 

This is why it’s important to get on top of your tax planning and get on top of it early.

To help you get started, we’ve put together our five key takeaways for getting prepared for the End Of Financial Year:    

  1. Get your bookwork up to date to the end of March 2022.

    Obviously, most farmers would be doing quarterly business activity statements, so you’ll be getting those done early. This year more than ever it is important get up to date so that in the month of April, you can really hone in on your tax planning. 

  2. Have a look at your income and expenses for the next three months and estimate what income is going to come in and what expenses you’re likely to incur for the next three months. 

  3. Thirdly, I suggest you project out the following financial year, so from July through to to June next financial year.

    It’s really important because when you’re looking at tax planning, not only do you need to consider the current year, but you also need to consider the following year as well. 

  4. Once you’ve got all your homework done, make an appointment with your accountant and then get ready for some tax planning strategies that you can put in place.

  1. Most importantly, once you’ve got that all together and you’ve spoken to your accountant, it’s time to take action prior to the end of financial year.

Throughout the coming month, we’ll be talking to accountants in our network of clients and finding out what strategies they’re thinking of using for their farming clients.

This will help provide you with some ideas of what you could potentially do prior to the end of the financial year.

As I said earlier, it’s worthwhile considering how things are going to look into next financial year.

The reason for this is due to what we have been hearing from the various accountants we have been talking to.

If your position is going to change considerably and it looks like you’re going to have a good financial year and big years following, it might be worth considering a change in the structure of your trading entity.

For example, if you’re operating via a partnership, perhaps that may no longer be the right way to go for you.

Talk to your accountant about what may be an alternative; whether to use a trust or whether you possibly use a company.  

It is extremely important to note that this is general advice only.

You cannot really take action on what we’re saying here because we don’t know your full circumstances, but it is important to consider your options moving forward.

Before you do anything around tax planning, please talk to a qualified tax agent who is able to provide you with sound financial advice tailored to your circumstances.


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