farm with barn at sunny autumn morning

FAQs

Find answers to commonly asked questions about our accounting services.

Should I lease my next piece of equipment or purchase it and make loan payments for the next 5 years?

Each of these buy/lease decisions is unique in that they all have different terms and interest rates as well as buy outs.  Operating lease payments are tax deductible in the year that they are made while purchased assets are depreciated over their useful lives. 

Depending on the type of asset and which Capital Cost Allowance class it goes into it may be tax advantageous to lease.  This is especially relevant to long lived assets such as bins or shops which generally have a low depreciation rate.  Contact us with your particulars and we can provide guidance on your particular situation.

What do I have to do to be considered a “farmer” for tax purposes?

Contrary to popular belief, there is no income or expense amount that is necessary to be considered a farmer for tax purposes.  If the venture is carried out in a business- like manner with a reasonable expectation of profit (even many years in the future) we can file a farm business statement on your tax return reporting the income and expenses of your farming operation. 

There is no need for any special registration or reporting.  Different institutions such as Saskatchewan Government Insurance (SGI) and Ministry of Finance (Farm Fuel Rebate) have specific requirements and we would be glad to assist you in navigating the processes for informing all of the differing agencies of your farming venture.

I want to start a side business – what do I need to do?

The most important thing is to keep track of your income and expenses relating to your business activities.  Whether this is by using a computerized package such as QuickBooks Online or a piece of looseleaf paper the important thing is to write it down. 

You do not need to register a business name or get a Business Number to have a business.  Once certain income thresholds are met, you may be required to register for the GST ($30,000 for most) but it is not a defining factor of operating a business.  You may need to register for the Provincial Sales Tax depending on the nature of your business.

I want to give my grandkids some money for school – can I deduct this from my taxes?

Short answer is no. 

The student may be able to transfer the tuition credit to a parent or grandparent on the T2202A which becomes available by February 28 of the year following their attendance at school.  The tuition credit is a non-refundable tax credit that the student may transfer if they cannot use it themselves and choose not to carry it forward. 

The maximum transfer is $5,000 of tuition which converts to a $750 tax savings at the current 15% federal tax rate.

Ready to streamline your accounting process?

Contact us now to schedule a consultation and explore how our expert services can benefit you.