Expense or capital: it’s not always easy to determine

Whether an expenditure should be classified as a repair or a capital asset for tax purposes is a common question. The classification of large expenditures on your buildings, machinery and other farm property can significantly change your tax situation. Some expenditures such as oil filters or belts are easy to classify as repairs, while others […] Read more

New exclusions made to proposed income sprinkling rules

The federal finance department recently announced simplification to the new proposed income sprinkling rules that begin to apply in 2018. It has provided clear guidelines (“bright line tests”) for when these rules will no longer apply to a taxpayer. The changes appear to provide relief for a majority of structures that farms may have in […] Read more

Optional inventory or deferring: how do they compare?

Farmers are relieved that the grain ticket deferral option has been saved, but they should also be aware of the optional inventory adjustment when planning their taxes. Grain ticket deferrals are useful because they help to smooth income by allowing grain to be delivered in one year and cash to be received and tax paid […] Read more

Here is the latest on Ottawa’s tax change proposals

The federal government has made several amendments in the past month to its proposed tax changes for private corporations. Since July 18, when the initial proposal was released, there have been many areas of concern on how the proposal would affect family farm corporations. Some of the most worrisome parts of the proposal have been […] Read more

Which GST remittance method is right for you?

The Goods and Services Tax affects all farmers in the Western provinces. The basic rule is that you must be registered for the GST if you have GST-taxable sales (either five percent taxable or zero-rated) over $30,000 in the last four quarters. In most cases, the agricultural goods that you sell are considered zero-rated, that […] Read more

Ottawa proposes stricter rules on income sprinkling

The federal finance department recently released a consultation paper focusing on owners of private companies in Canada. The proposed rules are aimed at eliminating tax planning strategies that the finance department believes “inappropriately reduce personal taxes.” Because most farming corporations in Canada are private companies, these new rules could be applicable. Under the current rules, […] Read more

Can I deduct that: ‘reasonable expenses’ to earn income

A common question I receive is whether a certain expense is deductible for tax purposes on a farm. A common mistake people make is claiming personal expenses as farm expenses. When this issue is uncovered, it generally results in all unreasonable business expenses to be denied. On top of this, penalties can be charged, and […] Read more

Insurance coverage among things to consider when hiring employees

Many family farms have grown larger, acquiring and seeding additional acres. As the family farm expands, so does the demand for skilled labour. There are a number of things to consider when hiring employees to work with you on your farm, such as government filing requirements, employee retention and having adequate insurance coverage. Payroll filing […] Read more

How to determine if youare an active farmer

Quick, check your heart rate. No, not to see if you are living an active lifestyle but to see how nervous this subject makes you. I recently received a question on the consequences of being an active versus inactive farmer. We notice many clients coming in with a different perspective of how these rules apply, […] Read more

Small business deduction changes may affect your farm

Farmers may be left wondering as they prepare for the coming production year why they have less cash in the bank. One factor could be the result of new tax rules that came into effect March 21, 2016. A number of farm corporations and partnerships have lost access to the small business deduction, resulting in […] Read more