Tax tips and credits for farmers
(NC) As an Ontario farmer and small business owner, it's important to leverage all the tax credits available to you. Here are some helpful tips from CGA Ontario's Personal Tax Planning Guide:
• Farmers using the cash basis of accounting should note that when an expense is paid using a credit card, the relevant date of payment for tax purposes occurs when the expense is charged to the credit card, not when the credit card is paid.
• Expenses for dogs and cats located on the farm are deductible if those expenses relate to their use for rodent, or other wild-animal control, or for security.
• Because the CRA considers crop advances to be loans, in a better than average year, consider storing all or part of the crop and then taking an advance against it. This advance, which must be applied for early in the year, serves as an effective planning technique for farmers using the cash basis of accounting.
• Capital Gains Deduction -The 2013 federal budget proposed to increase the lifetime capital gains exemption for individuals from $750,000 to $800,000 effective for the 2014 taxation year, and then indexing it each year thereafter. At a 50 per cent inclusion rate, that represents a taxable amount of $400,000. Ontario has followed suit regarding that provision. An individual's ability to claim the capital gains deduction may be reduced by past claims for capital gains deductions and allowable business investment losses.
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