Brooks (Rural Roots Canada) – A tax expert says there are some proactive tools farmers can use when it comes to claiming their income from livestock and crops.
Tony Benevides is with FBC.
When it comes to livestock, Benevides says the livestock tax deferral provision is a tool producers can use depending on the type of year they are having.
“If sale prices are up, sale prices are down, disease running through your barn, whatever the case may be make sure that you use that deferral provision,” Benevides said.
Benevides says tax returns for agricultural producers have some flexibility to them and this is a proactive tool farmers can use.
He says grain producers should also take advantage of deferred cash grain tickets.
“Someone purchases your corn, your grains and then coming up with a tax plan to take advantage of what you can do to claim that income in that year or possibly depending on what your tax situation may or may not might be put yourself in a position where you are using that grain ticket where it is optimal from a tax perspective.”
Benevides says it is also really important to track your mileage because if you don’t the Canada Revenue Agency could disallow all of your vehicle expenses.
“Now there’s apps available that do it all for you. They will track how many kilometres you drove. It will ask you is this ‘business or pleasure?’ And then at the end of the month, it will give you a statement of the kilometres driven what they were for and how much was business, how much was personal.”
Benevides says this will be key if you get audited because the CRA will ask for you mileage log, when reviewing vehicle expenses.
Benevides spoke at RRC Virtual Ag Days in July.