Day 5: tax words to ask your accountant about

Tax is a job for your accountant. We don't give tax advice, and every farm is different. But knowing the words helps you ask good questions.

Words about time

Financial year. Services Australia says a financial year is from 1 July to 30 June. Most farm accounts and tax returns run on it. That's why the bank asks for accounts "for the year ended 30 June".

Words about GST

GST (goods and services tax). The ATO says GST is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. A business must register for GST if its GST turnover is $75,000 or more.

GST-inclusive and GST-exclusive. A GST-inclusive price has the GST in it. A GST-exclusive price doesn't. Quotes and invoices should say which.

BAS (business activity statement). The form a GST-registered business uses to report its sales and purchases to the ATO, and to pay GST owing or get a refund. Your accountant or bookkeeper usually prepares it.

Words about saving for lean years

Farm management deposit (FMD). An ATO scheme that helps primary producers set money aside in good years and draw it back in lean ones. For 2025 to 26, the ATO says:

• The minimum deposit or repayment is $1,000.
• All deposits held at any one time can't be more than $800,000.
• Amounts repaid within 12 months generally don't get the tax concession, except in some cases of natural disaster or severe drought.
• You can't claim a deduction for the year if your taxable non-primary production income was more than $100,000.

Whether an FMD suits you is a question for your accountant.

A word with a tax side

Depreciation. You met this in lesson 1. In the accounts it spreads the cost of machinery and buildings over their life. The tax rules can work differently. Ask your accountant how they apply to you.

Questions to take to your accountant

• Is the business registered for GST, and who does the BAS?
• When are our tax payments due this year?
• Would a farm management deposit suit us?
• How are livestock and machinery treated for tax?

Write the answers down. Next time the bank or the accountant uses a word you don't know, ask. Good advisers are happy to explain.

If you'd like someone to go through your farm's numbers with you, our Farm Health Check is a good place to start.