Engaging your accountant from planting to harvest
27 May 2025
Regional Area Manager for North Queensland, Angelo Rigano's monthly agribusiness tip
Tax time shouldn’t be the only time you talk to your accountant.
With the new financial year approaching, I’m explaining five reasons why you should engage your accountants and financial advisors early and maintain regular communication with them.
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Proactive strategy development: Early engagement allows farmers to develop strategies that align with their financial goals and tax obligations. For instance, if a profit increase is projected, strategies can be implemented to defer income or accelerate deductions to manage higher tax brackets effectively. -
Seasonal purchases and investments: In farming, timing of purchases can impact tax liabilities significantly. Accountants can guide you on the optimal timing for acquiring assets to take advantage of tax breaks or accelerated depreciation methods. This can improve cash flow and reduce taxable income.
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Tax credits and deductions: Various tax credits and deductions are available that are specific to the agricultural sector, such as for water conservation, soil health improvement, and sustainable farming practices. Financial experts can ensure farmers are taking advantage of the eligible benefits available to them which can reduce their overall tax burden.
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Income averaging: Accountants can help implement income averaging – a method especially useful in agriculture where income can significantly vary from year to year. This tool allows farmers to average their profits over several years, potentially lowering tax obligations in exceptionally profitable years.
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Streamlined record-keeping and compliance: By working closely with financial professionals, farmers can ensure their record-keeping meets regulatory standards, which is essential for audits and accurate tax filing. This proactive approach helps avoid potential fines and penalties due to non-compliance or errors.
So, what now?
If you haven’t already, look into engaging an accountant or financial advisor to gain a clear understanding of your current tax position. An accountant with expertise in agricultural businesses can provide a comprehensive analysis of your operation’s financial health including taxable income, potential deductions, and eligible tax credits specific to the agricultural sector.
This baseline understanding is crucial for strategic decision-making throughout the year and will help set your farm business up for long-term success.
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