Accelerated Depreciation for Primary Producers

Can you claim sooner rather than later?

Some changes were recently made to the time frames in which Primary Producers and Small Business Entities can claim expenses for certain asset purchases. The good news is many items related to fencing, water storage and fodder storage, can now be claimed much sooner helping to reduce taxable income earlier.

Specifically:

• Immediate (full) deduction is available for the cost of Fencing & Water
  • Previously up to 30 years for fences & 3 years for water storage
• Three year depreciation for Fodder Storage assets (like silos & tanks)
  • Previously up to 50 years

Equally, as many primary producers in our area would also qualify as an SBE(annual turnover is less than $2,000,000), you may also have the option to choose the immediate deduction for asset purchases up to $20,000. This will depend on which methods works best for your specific situation.

An example is outlined in the attached information link, where-by a $19,000 silo was purchased by a SBE Primary Producer. The owner has 2 choices, claim over 3 years or claim immediately.

The good news is you now have an opportunity to claim expenses earlier and you also have options to choose from.

This Proactive Ponder Blog sets out to keep you ahead of the game with changes to tax law and better ways to manage your financial future.  The advice provided in this article is of a general nature and should be taken as such. As always we are happy to discuss your individual situation with you to ensure you get the best advice and outcomes for you, your family or your business.

Please contact us if you have any questions.