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TAX TIME TIPS

TAX TIPS FOR EMPLOYEES & CONTRACTORS
Tax Time 1656920403
Keeping on top of your taxes can be confusing and there are lots of rules to follow. With the ATO checking work-related expenses, looking for undeclared income and data-matching more information than ever, it’s important to get your tax return right.
Speak with a registered tax agent to help you manage your taxes the best way possible.
Lodge on time
If you’re lodging your own tax return, you need to lodge it by 31 October 2022.
If you use a registered tax agent, and are on their client list before 31 October 2022, you will generally be given an extended due date.
A lot of information will be pre-filled by the ATO in your tax return. So it’s best to wait until all the data is finalised before lodging. This is usually completed by the end of July but can take until mid-August.
Check that your end-of-year income statement from your employer says “tax ready” and your private health insurance, dividend and interest information is available before completing your return. Otherwise it may include unfinalised data and you may need to amend your tax return and pay additional tax.
Are you a resident for tax purposes?
The tests used to work out residency status for tax purposes are not the same as residency tests used for other purposes such as immigration. The rules can be complex and the ATO publishes tailored information for international students, working holiday makers, dual residents and non-residents temporarily in Australia or Australian tax residents temporarily stuck overseas as a result of COVID-19.
Are you in business?
It’s important to understand the differences between a hobby and a business for tax purposes. There’s no simple definition and sometimes what starts out as a hobby grows into something more. Factors to consider include whether you intend to make a profit, repeat similar types of activities or carry out activities in a businesslike manner. The ATO provides information on online selling, share trading, and home-based business and you can test out the business.gov.au tool.
You can’t claim a loss for a business that is little more than a hobby or lifestyle choice. However, you can defer the loss until you make a profit from the business.
Report your income
Your income statement
You can access your income statement from your employer through ATO online services in myGov. It will show as “tax ready” by 31 July.
Your tax agent can also access your income statement for you.
Government payments
The ATO prefills tax returns with a number of Australian Government payments including JobSeeker and Newstart by the end of July 2022.
Check that all required allowances and payments have been included in your tax return but don’t include amounts that are not taxable such as tax-free government pensions and benefits.
For individuals, pandemic leave disaster payments are treated the same as your usual salary or wages. If you received a pandemic leave disaster payment, Services Australia will advise you of the amount received.
You should also check the tax treatment of disaster assistance payments.
Contractors (i.e. sole traders) who received COVID-19 or disaster-related support may need to report and pay tax on those amounts. The ATO has published information on the tax treatment of a range of federal, state, territory and local government assistance packages.
Termination and redundancy payments
You need to include income protection, sickness or accident insurance payments, redundancy payments and accrued leave payments in your tax return.
If you take leave, are temporarily stood down or lose your job and receive a payment from your employer, there are different tax rules that apply for the different payments.
Online, sharing and gig economy
If you drive people around, do odd jobs, rent out your possessions, run social media accounts or sell products, your income from these activities may be assessable and your expenses deductible. This can include income from barter, cryptocurrency and the sharing economy as well.
The ATO receives data from a range of sharing economy platforms which is matched against tax returns. Make sure you keep records and report this income correctly.
For some activities such as online selling or personal services, you first need to determine whether you are in business.
Cash payments
It’s ok to receive income in cash but you must declare these amounts in your tax return.
If you’re an employee who’s paid cash, your employer must still pay you the correct award wages, withhold tax from your pay and pay your super as required by law. They must also provide you with an income statement at tax time which should match up with the income they paid you.
For contractors, the consequences of not declaring cash income may include a tax bill with interest as well as criminal and administrative penalties. The ATO is cracking down on the shadow economy so it’s best to do your taxes properly.
Personal services income and sole traders
If more than 50 per cent of the amount you received for a contract was for your labour, skills or expertise, then the personal services income (PSI) rules may apply.
As a sole trader earning PSI, you won’t be able to claim certain deductions against your PSI. For example, rent, mortgage interest and payments to your spouse or associate would generally not be deductible.
Claim your expenses
You can use the ATO’s myDeductions app to keep track of your expenses during the year then upload the information into your tax return through myGov.
Work-related deductions
Claiming all your work-related deductions may considerably reduce your tax bill.
Typical work-related expenses include:
– uniforms and protective items
– working from home
– employment-related mobile phone and internet costs
– subscriptions and union fees
– travel expenses between worksites or client locations (but not the commute to and from home).
If an expense was for both work and private purposes, you can only claim a deduction for the work-related portion.
You generally can’t claim the cost of travelling to and from work.
Make sure you keep receipts, diaries and documents to back up your claims and show how you calculated your private use percentage. The ATO publishes fact sheets for a range of occupations.
Be aware that the ATO checks work-related deductions closely and uses real-time analytics to detect claims that appear out of the ordinary.
Remember, for an expense to qualify:
you must have spent the money yourself and weren’t reimbursed
it must directly relate to earning your income, and
you must have a record to prove it.
Working from home expenses
You may be able to claim a deduction for working from home expenses like electricity, office equipment, phone and internet expenses.
Coffee, snacks and toilet paper aren’t deductible and, for most employees, neither are rent, mortgage interest, water or rates.
There are three ways you can claim home office expenses and you should consider which method will get you the biggest deduction particularly if you have pricey assets to depreciate or high running costs.
The shortcut method allows you to claim a deduction of 80 cents per hour worked at home and doesn’t require you to have a dedicated work area, such as a private study. But be careful – if you use this method, no other expenses for working from home can be claimed. You must keep a record of the number of hours you worked from home. This could be a timesheet, roster, diary, or similar document that sets out the hours you worked.
The fixed rate method gives you 52 cents for each hour for home office expenses and covers the decline in value of furniture and furnishings, electricity and gas, and the cost of repairs. You must have a dedicated work area such as a home office. You need to keep a record of hours worked as well as a diary for four-weeks to show your usual work-from-home pattern.
The actual cost method is exactly that – your actual costs. If you don’t have a dedicated work area, such as a home office, you will generally only incur minimal additional running expenses. All actual cost claims need to be supported by records of hours worked, receipts and how you worked out the amounts claimed particularly if you work in a shared space.
COVID-19 test expenses
From 1 July 2021, if you’re an employee, sole-trader or contractor and you pay for a COVID-19 test for a work-related purpose, you can claim a deduction if you:
-use the test for a work-related purpose, such as to determine if you can attend or remain at work
– bought a qualifying COVID-19 test
– pay for the test yourself
– keep a record to prove that you incurred the cost (usually a receipt), and
were required to take the test for work purposes
You can only claim the work-related portion of your expense on COVID-19 tests. For example, if you buy a multipack of COVID-19 tests and use some for private purposes (such as by other family members or for leisure activities), you must only claim for the portion of the expense you use for a work-related purpose.
Self-education expenses
You can claim self-education expenses provided your studies are directly related to either maintaining or improving current occupational skills or are likely to increase income from your current employment. If your study is unrelated to your work, the expenses incurred are not deductible.
Typical self-education expenses include course fees, textbooks, stationery, student union fees and the depreciation of assets such as computers, tablets and printers.
You must also disallow the first $250 of self-education expenses incurred from a place of education, such as from university or college. This $250 can be offset by non-deductible amounts such as childcare while attending self-education activities or capital expenses related to self-education.
Higher Education Loan Program (HELP) repayments are not deductible.
Car expenses
If you use your motor vehicle for work travel, you have two choices to claim expenses
The cents per kilometre method provides 72 cents per kilometre for travel up to 5,000 kilometres. This amount includes all your vehicle running expenses, including depreciation.
If your work travel exceeds 5,000 kilometres, you must use the logbook method to claim a tax deduction for the work-related portion of your car expenses. You’ll need to keep odometer readings, receipts and invoices to support your claim.
In most situations, you can’t claim any expenses under these methods relating to a car owned or leased by someone else, including your employer or another member of your family.
Travel expenses
You can claim certain travel expenses incurred when travelling overnight for work. These may include meals, accommodation, transport fares, bridge and road tolls, car parking, car hire fees and other incidental costs.
You will need to reduce your claim if your trip and travel expenses are partly private. You may also need to adjust the amount claimed if you receive a travel allowance.
Trips between home and work are generally considered private travel and aren’t deductible. There are some situations that you can claim such as travelling from your home to an alternative workplace, when you need to carry bulky tools or equipment or when you do itinerant work.
If you ‘travelled on work’ during COVID-19 and had to quarantine, you can claim a deduction for accommodation, food, drink and incidental expenses. No deduction is available for private quarantine expenses or when you travel to or from a work location and need to quarantine.
The record-keeping rules depend on whether you receive a travel allowance, travel for six nights or more and whether you are claiming less than the reasonable amount. Keep track of your travel allowances, maintain a travel diary and store your receipts to make it easier to support your claim.
Depreciation
Immediate deductions can be claimed for assets that cost under $300 to the extent the asset is used to generate non-business income. These include tools, calculators, briefcases or computer equipment.
Assets over $300 that are used for an income producing purpose can be written off (depreciated) over a period of time as a tax deduction.
The amount of the deduction is generally determined by the asset’s value, its effective life and the extent to which you use it for work purposes.
Be aware that if you use the ATO’s 80 cents per hour shortcut method for working from home claims, you cannot claim depreciation for your home office assets such as furniture.
Expenses for contractors
You can claim a deduction for most costs you incur in running your business, such as travel, car, marketing, home-based business expenses and business finance costs. For asset purchases, consider the simplified depreciation rules. Make sure you account for private use correctly, and keep good records.
Donations
The ATO will pre-fill your tax return with information they have received about gifts and donations. Make sure you add in any donations that weren’t included where the receipt shows your donation is tax deductible. Also include donations make through workplace-giving. You can also claim a tax deduction of up to $10 for certain donations without a receipt.
Superannuation contributions
Consider maximising your concessional or non-concessional contributions before the end of the financial year with a concessional contribution cap of $27,500 for the 2022 income year.
Carry-forward rules also allow you to make extra concessional contributions without having to pay extra tax.
Check your superannuation contribution and don’t leave it until 30 June to make your contributions as your super fund will not receive the contribution in time.
You may also be able to claim a tax deduction for personal super contributions that you make from your after-tax income.
Tax offsets
Tax offsets directly reduce your tax bill. Eligibility for tax offsets generally depends on your income, family circumstances and specific conditions. Some offsets are automatically applied while you’ll have to provide additional information on your return for others. Most offsets are non-refundable meaning they can reduce your tax bill to zero but any excess isn’t refunded to you.
Examples include the low and middle-income tax offset (LMITO) which gives eligible individuals up to $1500 in tax offsets and the small business income tax offset of up to $1,000.
Investments

TAX TIPS FOR INVESTORS
Our investor tips can help you increase your wealth, whether you invest in property, finance or other assets.
Many Australians invest in property, financial markets and other assets, both in Australia and overseas. Managing the tax on your investments can help you increase your wealth.
The ATO’s data matching and information-gathering capabilities are significant and cover many capital transactions and investment revenue streams.
Speak with a registered tax agent who can advise you on the tax consequences of your investments.
Property investments
If you’re renting out a whole home or just a room, you’ll need to declare the income. The ATO has an ongoing focus on checking rental deductions and is matching reported income against details from property managers, rental bond authorities and sharing economy platform providers.
Make sure that interest expense claims are correctly calculated, rental income is correctly apportioned between owners, depreciation calculations are done properly and holiday homes are genuinely available for rent. Advertising your property via word of mouth only won’t cut it, nor will advertising it at above the market rate. The ATO keeps a watchful eye out for people who try to obtain rental tax deductions for periods when a property is only available for personal use and targets postcodes where holiday homes are located.
Landlords can claim deductions for a range of expenses such as interest on investment loans, land tax, council and water rates, body corporate charges, repairs and maintenance and agents’ commissions. Make sure you keep evidence of each deduction that you intend to claim. This could be in the form of invoices, receipts, bank and credit card statements, lease agreements, or other suitable documentation. A good tip is to check your rental expense receipts against your bank and credit card statements to ensure that all rental expenses are captured. It also helps to keep separate accounts for your investments to make record keeping and tax time much easier.
Summarising your records into categories such as interest, depreciation, fees and bills will make it easier for your tax agent, and can reduce the time and expense of preparing your tax return. Consider using the ATO’s myDeductions app to stay on top on record keeping throughout the year and share it with your tax agent.
Landlords may be entitled to claim depreciation for the declining value of assets such as stoves, carpets and hot-water systems. They may also be able to claim a deduction over a number of years for capital works, such as re-modelling a bathroom.
Depreciation deductions for residential properties are now limited to outlays actually incurred on new items. Although for properties acquired from 9 May 2017, you can no longer depreciate assets that were in the property at the time of purchase – you may be able to claim certain building and construction costs for your rental property. Don’t underestimate the amount of building write-off per year that you may be able to claim as a capital works deduction if your property is eligible. You must obtain a tax report from a qualified professional like a quantity surveyor and we recommend you also get your tax agent to calculate the claim.
Residential landlords cannot claim travel deductions relating to inspecting, maintaining or collecting rent for a rental property.
COVID-19 has raised a number of tax issues to consider including booking cancellations, insurance for lost rent or rent concessions. You may also need to make adjustments if you’ve changed how you use the property.
If you hold vacant land, deductions for costs are limited for certain owners. The rules can be complex and the ATO has produced a flowchart to assist in determining whether this affects you.
There are also specific capital gains tax implications for non-resident owners of Australian residential property.
The ATO has information on holiday homes, renting out part or all of a home and holiday apartments in commercial residential properties, as well as their Tax time toolkit for investors. You’ll also need to lodge a multi-property rental schedule with your tax return.
Cryptocurrencies and digital assets
With almost one in five Australians investing in cryptocurrencies, it’s important to know that you may need to report your gains and losses to the ATO and pay tax on any net capital gains when you:
-sell or gift cryptocurrency
-trade or exchange cryptocurrency
-convert cryptocurrency to fiat currency, such as Australian dollars, or
-use cryptocurrency to obtain goods or services.
The rules apply when you exchange one cryptocurrency for another cryptocurrency and for chain splits, staking rewards and airdrops.
The income tax treatment of non-fungible tokens (NFTs) follows the same general principles as cryptocurrencies.
The ATO now matches transaction data from digital exchanges, so it is more important than ever to ensure cryptocurrency gains and losses are correctly reported.
If you use cryptocurrency in business, such as to run your start-up or to trade large volumes of cryptocurrency, different rules apply.
Capital gains tax planning
You should carefully consider the timing of when you sell assets and the capital gains tax consequences. This includes being mindful of the main residence exemption and holding eligible assets for at least 12 months to access the 50 per cent capital gains tax discount for individuals.
Keep proper records for all of your investments and ensure that you keep them for at least five years after a capital gains tax event occurs.
Foreign income and investments
If you are an Australian tax resident with overseas assets you need to include any capital gains or losses and any assessable income received from overseas. If you have paid tax overseas, you may be entitled to a foreign income tax offset.
Be aware that the ATO has information exchange agreements with revenue authorities in many foreign jurisdictions and therefore is likely to receive data on any of your overseas investments and income.
Exchange traded funds
Exchange traded funds (ETFs) are an increasingly popular investment product but calculating the tax on them can be complicated. You will need to separately report the various distributions and capital gains amounts in your tax return according to specific rules.
While many investors will receive a member annual statement with the necessary details, these reports are optional. Follow up with your fund or registry if you require further information to complete your return.
Investment deductions
You can claim a deduction for expenses incurred in earning interest, dividend or other investment income, but not for exempt dividends or other exempt income.
Examples of investment deductions include
account-keeping fees for investment accounts
interest on money borrowed to buy shares and other related investments
ongoing management fees or retainers and amounts paid for advice
a portion of other costs, such as some travel expenses, investment journals and borrowing costs.
If you attend an investment seminar, you are only entitled to claim a deduction for the portion of travel expenses relating to some investment income activities.
Investment products
You can claim a deduction for expenses incurred in earning interest, dividend or other investment income, but not for exempt dividends or other exempt income.
Towards the end of the financial year, you may see the promotion of investment products that claim to be tax effective. Check to see if a product ruling is available or if a taxpayer alert has been issued by the ATO.
You should form your own view about the commercial and financial viability of a product. Consider seeking independent advice.
Business,

TAX TIPS FOR SMALL BUSINESS
Small business owners often interact with the ATO and their tax agent throughout the year. Tax time provides an added opportunity to ensure your tax affairs are in order, obtain essential tax advice and see if you can improve your tax position.
You should obtain professional tax advice, especially in areas where more complex tax issues arise. This includes refinanced debt, losses, restructures, capital gains tax, personal services income, trust declarations and distributions, and private company loans.
If you are seeking advice, have made errors or need to correct your business records, speak with a CPA Australia-registered tax agent who can work with you to get things right.
The basics
Getting the basics right has never been more important – good record keeping, correct account codes, properly accounting for private use, keeping lodgements and payments up to date and declaring all cash transactions are essential to assure yourself, your tax agent and the ATO that your tax affairs are in order.
When keeping your records, make sure to:
-record cash income and expenses
-account for personal drawings and use of company money or assets
-record goods for your own use
-separate private expenses from business expenses
-keep valid tax invoices for creditable acquisitions when registered for GST
-keep adequate stock records
-keep adequate records to substantial motor vehicle claims.
Contact the ATO to rectify any errors or mistakes. If you make a voluntary disclosure, you can generally expect a reduction in the administrative penalties and interest charges that would normally apply.
Your tax agent is required to take reasonable care when preparing your return, which means they may ask you detailed questions about your cashflow, business performance, personal use of assets and records.
Income
Covid-19 and disaster payments
Many businesses received COVID-19 or other disaster-related support from government during the year. The ATO has published information on the tax treatment of a range of federal, state, territory and local government assistance packages. You should also check the tax treatment of disaster assistance payments.
Personal services income rules
Personal services income (PSI) is income produced mainly from your personal skills or efforts as an individual. It commonly includes medical practitioners, construction workers, financial professionals and IT consultants.
You need to check whether the PSI rules apply or whether you’re running a personal services business (PSB). Once you determine the PSI rules apply, you’ll need to attribute PSI to each individual who produced the income and ensure that you are withholding correctly.
The ATO is also looking at the allocation of profits within professional firms.
We recommend seeking professional advice on issues related to personal services income, personal services business and profit allocation.
Deductions
Optimise depreciation deductions
There are several ways you can depreciate your assets and many businesses use the simplified depreciation rules.
Temporary full expensing allows eligible businesses to immediately deduct the full cost of eligible assets. The assets must be first held, and first used or installed ready for use for a taxable purpose by 30 June.
If you are a small business that chooses to use the simplified depreciation rules, you apply the temporary full expensing rules with some modifications. This includes deducting the balance of your small business pool at the end of the income years ending between 6 October 2020 and 30 June 2023.
If an asset isn’t eligible for temporary full expensing, the asset will be allocated to the general small business pool and depreciated at the appropriate rate, depending on if it is eligible for accelerated depreciation.
If you purchase a car for your business, the car limit is $60,733 for the 2021–22 income tax year. You cannot claim the excess cost of the car under any other depreciation rules.
Trading stock
Many small businesses use the simpler trading stock rules. However, supply chain disruptions mean that many inventories have varied by more than $5000, requiring a stocktake using the general trading stock rules. Consider which of the three valuation methods is most suitable for your business.
Write off bad debts
Businesses can claim a deduction for bad debts when various conditions are met. Examples include where the debtor cannot be traced, the debtor is in liquidation or receivership, there are insufficient funds or assets to satisfy the debt or there is little or no likelihood of the debt being recovered.
Certain additional requirements must be met where the creditor is either a company or trust. Special rules apply for private companies with debts related to shareholders or an associate of a shareholder.
Small Business Technology Investment and Skills & Training boosts
Two new deduction measures were announced in the 2022-23 Budget:
Small Business Technology Investment Boost: an additional 20 per cent deduction available for the cost of business expenses and depreciating assets up to $10,000 that support digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud based services
Small Business Skills & Training Boost: an additional 20 per cent deduction available for expenditure incurred on eligible training courses provided to employees.
However, these measures are not yet law and if the incoming government does not proceed with these measures, then you will not be able to claim the additional 20 per cent deduction.
To claim for eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:
-claim the expenses as usual in your 2021–22 tax return, and
-claim the additional 20% bonus deduction for this period in your 2022–23 tax return.
Tax payable
Company tax rate
Most companies with an aggregated annual turnover of less than $50 million will pay tax at 25 per cent in 2021–22. However, companies with more than 80 per cent of income from passive investments will continue to pay tax at 30 per cent.
In line with the changes to company tax rates, there have also been changes to the franking rules, which affects the allocation of franking credits.
Losses
Businesses may find themselves in a taxable loss position or seek to use prior-year losses when their business performance changes. Different loss rules apply depending on the business structure.
Partnerships distribute the loss proportionately to each partner, while trust losses can’t be distributed to beneficiaries. Companies are subject to rules such as same majority ownership and control, same business test or similar business test.
Eligible companies with a taxable loss may be able to claim the loss carry back tax offset. As it is a refundable tax offset, it may result in a cash refund, a reduced tax liability or a reduction of a debt owing to the ATO. The ATO will be checking franking accounts to ensure the offset is claimed correctly.
We recommend seeking professional advice on issues like the loss tests, loss carry back tax offset, the effect of capital injections on continuity of ownership tests and unrealised losses from reductions in asset values.
CGT concessions
In addition to the more widely available CGT concessions, small businesses can access the following specific concessions:
-15 year-exemption
-50 per cent active asset reduction
-retirement exemption
-rollover
-restructure rollover.
You can apply as many concessions as you’re entitled to until the capital gain is reduced to nil. There are rules about the order in which you apply the concessions, any current year or prior year capital losses, and the CGT discount.
The rules are complex and getting it wrong can be costly, so we recommend seeking advice before restructuring or disposing of assets and ensure your business structure is designed to take advantage of the available concessions.
Private use of company money or assets
There are rules around taking money out of your business or using its money or assets for yourself and your family. The private use of company money or assets is a focus area for the ATO and the consequences of getting it wrong can be costly.
Common ways to take or use money or assets from a company or trusts are:
-salary and wages
-fringe benefits
-director fees
-loans from the company
-trust distributions or company dividends
-allowances or reimbursements.
Depending on how the money or assets are extracted or used, there are a range of associated tax obligations. We recommend seeking professional advice to ensure that you are reporting correctly and keeping appropriate records.
Trusts
Trustees of discretionary trusts are required to prepare and document resolutions on how trust income should be distributed to beneficiaries for the 2021–22 financial year by 30 June. If a valid resolution is not executed by 30 June, there may be significant tax consequences including the trustee being taxed at 45 per cent.
Trustees of discretionary trusts may also be able to stream capital gains and franked dividends to different beneficiaries, but be aware that the streaming rules are complex.
There are rules for unpaid distributions owed by a trust to a related private company beneficiary and where a beneficiary’s entitlement arises out of a reimbursement agreement. The ATO has recently issued draft guidance on reimbursement agreements and unpaid present entitlements. We recommend that you seek professional advice to understand how it affects you.
Additional tips
Single Touch Payroll
Employers need to make a finalisation declaration by 14 July 2022 so that employees can access their tax-ready income statements.
Before finalising, make sure the STP information is correct and apply for a deferral if you need more time.
Superannuation guarantee
Ensure superannuation guarantee payments for employees are up-to-date and make sure contributions are received by the nominated super funds by 30 June.
Report and rectify any missed payments to the ATO. If you do not pay an employee’s super guarantee on time and to the right fund, you must lodge a superannuation guarantee charge (SGC) statement and pay the SGC to the ATO.
The SGC is not tax-deductible and there are significant administrative charges, fees and penalties. It’s therefore important to ensure that you’re paying superannuation guarantee correctly throughout the year.
Taxable payments reporting system
Does your business earn income from building and construction, cleaning, courier, road freight, information technology, security, investigation or surveillance services? If so, you may need to lodge a taxable payments annual report by 30 August 2022 to report payments made to contractors.
The details you need to report are generally contained in the contractors’ invoices and include ABN, name, address and total amounts paid for the financial year.
GST adjustments
When you do a tax return for your business, your tax agent will often do a reconciliation against your GST accounts. This can identify misclassified transactions or unclaimed credits which will need to be fixed.
The ATO has worksheets to assist in calculating GST adjustments for sales, purchases, bad debts, creditable purpose and adjustments summary.
Businesses in financial distress
There are tax obligations to consider when deregistering a company and the ATO provides information for businesses in financial difficulty.
Individuals facing serious financial hardship can apply for release from their tax debts.
If you think your business is in financial difficulty, it is critical to get proper accounting and legal advice as early as possible.
Primary producers
One of the best tax planning measures available to primary producers is utilising the farm management deposits scheme (FMDs). They are an effective business and cash flow planning tool. Primary producers can deposit up to $800,000 in an FMD account and can then have early access to their FMD account during times of drought. You may be able to offset the interest costs on primary production business debt.
Tax averaging enables primary producers to even out their income and tax payable over a maximum of five years to allow for good and bad years. This ensures that farmers don’t pay more tax over time than taxpayers on comparable but steady incomes.
There are a range of other tax concessions available for primary producers and we recommend seeking professional advice to maximise the benefits.

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