Operating a farm in Canada can be a tough business, financially speaking. It's important that farm owners take every step available to maximize the money they bring in if they want to successfully operate year-after-year.
There are numerous deductions available to farmers in Canada. If you're not taking advantage of these deductions, then you're leaving massive amounts of revenue and income on the table.
Farmers who do take advantage of these deductions - some of which are listed below - are taking an important step toward financial success.
So make sure you study up on what costs and expenditures can be deducted - and if you run your own farm, you shouldn't hesitate to work with a company who specializes in farm taxes.
Small Business Deduction
Incorporating your farm as a small business brings with it both pros and cons - and you'd do well to discuss those factors with a tax planning firm. But if you are incorporated, you'll have access to deductions exclusive to small businesses as a result.
Many of the items you purchase that you need to run your business - from livestock to farming equipment - can be deducted from your tax payments. But you can only do so if you file and present these expenditures properly.
We've detailed the capital cost allowance before, and it's important that all farmers are aware of what it can provide for them.
Canadian tax law allows farmers to deduct some of the money lost on depreciable holdings - meaning the items and assets that lose value over time. So if a real estate holding, for example, is rapidly losing value, you may be able to claim some of the loss.
The three deductions above are very important to the financial success of farmers in Canada. However, these are hardly the only deductions available to people in this industry.
If you feel that you're not taking full advantage of the opportunities these tax deductions present, then you should employ a farm tax specialist - like FBC - to help you plan for your tax payments.
With a membership from FBC, you can be sure you're making the most of your payments - and saving as much money as is possible.