Central and North Burnett Times - - FRONT PAGE - Philippe Co­querand­querand

THE end of fi­nan­cial year is now upon us and it’s a great time to start get­ting your taxes into shape.

For pri­mary pro­duc­ers, in­clud­ing those in the North Bur­nett, tax time brings unique chal­lenges and con­sid­er­a­tions.

Ac­cord­ing to the Aus­tralian Tax­a­tion Of­fice, it can some­times help to use a method of ‘tax av­er­ag­ing’ which en­ables you to even out your in­come and tax payable across a max­i­mum of five years to al­low for the good and bad years.

Us­ing this method en­sures you aren’t pay­ing more tax than you need to.

For those who’ve never lodged their tax, the process is quite sim­ple. It is im­por­tant to note that your basic tax­able in­come is your tax­able in­come with some ex­clu­sions.

Th­ese ex­clu­sions are net cap­i­tal gains, cer­tain su­per­an­nu­a­tion lump sums and death ben­e­fit ter­mi­na­tion pay­ments and above aver­age in­come of an au­thor, in­ven­tor, sportsper­son or other pro­fes­sional.

The amount of the av­er­ag­ing tax off­set or ex­tra in­come tax is cal­cu­lated au­to­mat­i­cally and your no­tice of as­sess­ment will show in your av­er­ag­ing de­tails.

The av­er­ag­ing rules take into ac­count the com­par­i­son rate of tax, av­er­ag­ing com­po­nent and the gross av­er­ag­ing amount.

Some say when your aver­age in­come is less than your basic tax­able in­come you will re­ceive an av­er­ag­ing tax on­set.

How­ever, if your aver­age in­come is more than your basic tax­able in­come you must pay ex­tra in­come tax on the av­er­ag­ing com­po­nent.

If it turns out the av­er­ag­ing sys­tem is not for you, you can with­draw from the av­er­ag­ing sys­tem for 10 in­come years and pay tax at or­di­nary rates.

This sim­ply means you’ll be taxed on the same ba­sis as tax­pay­ers not el­i­gi­ble for av­er­ag­ing pro­vi­sions.

Once you make this choice it will af­fect all your as­sess­ment for 10 in­come years and this can­not be re­voked.

If you’re a small busi­ness en­tity you carry on a busi­ness and must have an ag­gre­gated turnover of less than $10 mil­lion.

You can also choose to ac­cess the small busi­ness con­ces­sions that suit your busi­ness if you com­ply within the rel­e­vant year.

Who is a pri­mary pro­ducer?

Ac­cord­ing to the ATO, as a pri­mary pro­ducer your busi­ness would in­volve one of the fol­low­ing: plant or an­i­mal cul­ti­va­tion, fish­ing or pearling, or tree farm­ing or felling.

The first op­tion of plant or an­i­mal cul­ti­va­tion in­cludes cul­ti­vat­ing or prop­a­gat­ing plants, fungi or their prod­ucts or parts (in­clud­ing seeds, spores and bulbs).

It also in­volves main­tain­ing an­i­mals for the purpose of sell­ing them or their bod­ily pro­duce.

For fish­ing and pearling, your busi­ness would be tak­ing and catch­ing fish, tur­tles, dugong or aquatic mol­luscs and tak­ing or cul­tur­ing pearl shells.

Tree farm­ing and felling is plant­ing or tend­ing trees in a plan­ta­tion or for­est that are in­tended to be felled. It can also be trans­port­ing trees or parts of trees that you felled in a plan­ta­tion or for­est.

If you are op­er­at­ing a busi­ness of es­tab­lish­ing trees for the purpose of car­bon se­ques­tra­tion, you will be el­i­gi­ble for car­bon sink for­est de­duc­tions.


MONEY MONEY MONEY: It's time to start sort­ing out those dock­ets and get­ting or­gan­ised for tax time.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.