Articles: Archived News

If your taxable income was low or negative in a given year, don’t waste that bottom tax bracket with its nice low marginal rate. Capture it with an optional inventory adjustment – and reduce your exposure to higher marginal rates in future years. For example…

Among the many benefits of owning a small-business corporation is the option to withdraw money via routes at reduced income tax rates. If your business is incorporated, you’re in the fortunate position of having different ways to pay yourself and, in some cases, your employees and shareholders.

Lock in the CRA’s low prescribed interest rate for non-arm's length loans to benefit from income splitting with family members

There are two types of interest in this tax world of ours – deductible and non-deductible. Obviously you want as much interest payable to be deductible.

Selling some farm owners on the wisdom of investing their hard-earned dollars in anything other than their own business can be difficult. They may want to put extra funds into buying more land or marketing quota to expand their operation. Or they may feel it’s best to direct funds towards various farm improvements or to pay down debt.

While there is a suitable time for all of these on-farm investments, investing everything back into the farm is not your best move for the long-term.

If you have a portfolio of off-farm investments, you should plan to review those investments on a regular basis to ensure you are minimizing the income tax they generate. A good time to do this type of tax planning is prior to year-end, while you can still take some actions to reduce your tax.

The federal government allows spouses to split their pension income for tax purposes. This income-splitting opportunity creates some confusion about the ability of spouses to split other types of income.

Income splitting rules help retired couples in which one spouse has a distinctly higher pension income than the other.

Make sure that any shares you hold in a family farm corporation meet the criteria that will make them eligible for the lifetime capital gains exemption (LCGE) when you dispose of them.

Operating most farms is highly capital intensive.

If you are like many farmers, you are asset rich and cash poor. You pour all of your hard earned money back into the farm. You know how much blood, sweat and tears it takes every day to ensure your bottom line.