Year End Tax Planning For Farmers/Ranchers

It’s that time of year. Why worry about taxes now?

By planning now, your strategies can lower your tax bill in advance before you are required to file. Tax planning is not only for “Tax Planning”. Tax planning provides a financial picture of your debt commitments, future marketing commitments, cash flow projections, major equipment sales and purchases and a window of opportunity for the upcoming crop/calf year. Collecting and reviewing both financial and non-financial information allows you to track your progress towards your goals. And, equally important, it allows you to make corrective steps necessary to be on track of your goals.

 
Some strategies in year-end tax planning.

. Deferring income and taxable capital gains.
. Triggering capital losses.
. Timing of purchases. Pre buying inputs.
. Planning for capital purchases using accelerated write offs.
. Managing your income using mandatory and/or optional inventory.

Tax planning is another way in analyzing the health of your financial situation. Visit your accountant or at least discuss a strategy in reducing your tax bill before year end. Remember, planning serves the interest of the farming/ranching business that supports your family’s life style.

Wishing you all a Merry Christmas and the greatest success in the New Year

Your thoughts are always appreciated

Take care

Fred Mertz

Fred@thevoiceofagriculture.ca