File Your Taxes Online with Coastal Tax

At Coastal Tax, we make it as simple and painless as possible to file your taxes! Check out this short video about Intuit Link, the secure client portal we use to collect your tax documents. There is no in-person meeting required. This is the easiest way to have your taxes professionally prepared without leaving the house!

From the software company that brought you QuickBooks and Turbo Tax, Intuit Link will allow you to:

  • Review a custom checklist set up for you by Coastal Tax based on last year’s tax return
  • Use your smartphone or tablet to snap pictures of tax slips or receipts and attach them directly to the checklist
  • Respond to a short questionnaire created for you by Coastal Tax

Pricing starts at $80 for a simple return (up to 3 slips or items).

 

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Coastal Tax Speaking at the Grow & Gather Farm Expo – June 10-11, 2017

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Attention Mainland small-scale farmers or Islanders interested in making the trip to this great weekend conference!

I will be giving a 45 minute presentation on Saturday and Sunday on my Tax Tips for Small-Scale Farmers. I will also have an exhibitor booth and be available there for questions all weekend!

There is an amazing line up of expert speakers on all areas of interest regarding farming on 5 acres or less.

Early bird registration is open now!

-Alicia Loewen, Coastal Tax

New Expo Keeps Small Farms in Focus

CLOVERDALE, BC (April 4, 2017) — A new expo and educational event aims to help small farm owners maximize their productivity and keep within British Columbia’s farm-use regulations. Geared toward homesteaders, market farmers, hobby farmers, and those living on small ALR parcels, the Grow & Gather™ Farm Expo will assemble as many as 40 pros at the Agriplex in Cloverdale over just one weekend in June.

“We really think the timing is right,” says Bill Hardy, one of the event’s organizers. “While we hear all about monster homes consuming farm land, there is a sizeable sector that truly wants to steward their little agricultural plot—or their neighbour’s—and make good use of it. A lot of these folks are starting fresh, and don’t know where to begin. Or how to make the effort pay off.” The expo, he says, will focus on farmers operating five acres or smaller, and will cover aspects of small plot intensive farming, animal rearing, and sustainable and as well as urban farming topics.

The expo launches on the heels of Kwantlen Polytechnic University’s recent study, which asserts the region’s need to maximize food-production on small lots, and to better support its processing. According to Kent Mullinix, director of the Institute for Sustainable Food Systems at Kwantlen, “Farming itself will need to be transformed to take advantage of smaller parcels with human-scale and space-intensive systems.” With sessions featuring small plot intensive farmer, Curtis Stone, along with a myriad of other experts, organizers hope the event will play a part in this transformation.

The Grow & Gather™ Farm Expo takes place on June 10th and 11th at the Agriplex in Cloverdale; a weekend pass to all sessions costs $35 per person.

Tax Tips for Small-Scale Farmers

Living in the Cowichan Valley has so many benefits, but my favourite is the abundance of farm fresh products available. The Eat Local movement is strong here, and the farmers who produce this delicious bounty are a passionate and dedicated people. As a small-scale farmer myself, and a self-employed accountant, I thought I would share my tips for self-employed farmers at the start of the 2016 tax season.

Register for GST – Farms are different than other businesses because the sale of farm products is not GST taxable. However, a farm business that has a GST account can claim back the GST they paid on expenses (Input Tax Credits or ITCs). This results in a GST refund for the farm!

Open a business bank account – Treat your farm operation as a legitimate business and keep your business and personal finances separated. This makes it easier to prepare your bookkeeping, saving you time and money! If you need to transfer money in to the farm bank account this is considered a loan from you, the shareholder.

Save receipts & Use annual summaries – Save your receipts for any farm-related expenses. If you aren’t sure if something can be claimed, ask your accountant. Set up an account at farm feed stores such as Buckerfield’s and Top Shelf Feeds so that you can ask for an annual print out of your purchases. This can be used instead of keeping individual receipts.

Write receipts & Legitimize trades – Use a carbon copy receipt book for your farm sales direct to customers. Record in a notebook or spreadsheet what your road stand sales were every day. When you trade goods with another farmer (we all know farmers love to trade!) write receipts to each other for the cash value of your trades, as if you had paid each other in cash.12901072_10154078602447350_8123560335737903081_o

Keep a mileage log – When you use your personal vehicle for farm-related travel you can claim a portion of your auto expenses. The best thing to do is to keep a mileage logbook in your dash and record the details of the trip (Date, Destination, Reason, Round-trip Km). There are some great mileage tracker apps if you prefer to use your smartphone! 3 examples are Mileage Tracker Log, MileIQ, and TripLog. If you have a vehicle that is 100% farm use it is still good practice to keep a logbook as proof in case of an audit. You can also claim depreciation on a farm vehicle.

Arrange bookkeeping – You can prepare the bookkeeping yourself on a spreadsheet or by using software such as Quickbooks or Sage 50. Remember that if your farm has a GST account, the GST needs to be pulled out of every expense. Alternatively, you can bring your receipts and bank statements to a professional bookkeeper or accountant. Coastal Tax and Accounting Services performs cloud-based bookkeeping using QuickBooks Online and Hubdoc subscriptions.

Claim home expenses – If you are running a farm business on your personal property, you may be able to claim a portion of your mortgage interest, property tax, and other home expenses.

Apply for Farm Status – Although this point is not related to income tax, you can save a lot of money on your property tax if you receive farm status from BC Assessment.11705107_10153444730812350_7076268392361471119_n

Don’t call yourself a “Hobby Farmer” – The CRA defines a hobby farmer as someone who farms purely for personal use, with no expectation of profit, and so the expenses incurred are not tax deductible. Even if your farm business is not making a profit, if you are selling farm products to the public and trying to make a profit, you are not a hobby farmer. Depending on your employment situation, a farm loss can be fully or partially deductible against your other income. Talk with your accountant to determine the best tax treatment of your farm business.

Carryback or Carryforward a Farm Loss – A farm loss can be carried back 3 years or forward 20 years. Losses that have been carried forward can also be used to reduce the capital gain on farmland that has been sold.

Finally, if you are a self-employed farmer, or if you are the spouse or common-law partner of someone who is, note that your 2016 income tax return is due by June 15, 2017. This gives you more time to file if you are expecting a refund, but if you owe tax, the payment is still due by April 30, 2017.

The condensed version of this article is published in the March 2017 issue of the Cowichan Valley Voice magazine.

Happy Farming!

-Alicia Loewen, Coastal Tax

Tax Tips for Vacation Rentals

Many homeowners are making some extra income by listing their suite or home on short-term vacation rental sites like Airbnb or VRBO. If this is you, read on to find out some important tax tips for your vacation rental income!airbnb

  1. Determine if you have to charge GST – Most residential rentals are not GST taxable, but some short-term vacation rentals are taxable. GST must be charged on a residential rental when ALL of the terms below are met:
    • The period of occupancy is less than 1 month to the same individual
    • The consideration for the rental is $20 per day or more
    • The total income over the year is $30,000 or more and so the owner does not qualify for the small supplier GST exemption

    If you can say YES to the above three conditions, you are required by law to register for, collect, and remit GST. The good news is that you can claim back the GST you paid on expenses so make sure to keep those receipts! If you need help, Coastal Tax can set up a GST account for you, do the bookkeeping, and file the remittances.

  2. Rental or Business Income – You will need to determine if your vacation rental qualifies as rental income or business income. This affects the deductions that you can claim. For example, home office expenses can be claimed on business income.

    “In most cases, you are earning income from property if you rent space and provide basic services only. Basic services include heat, light, parking, and laundry facilities. If you provide additional services to tenants, such as cleaning, security, and meals, you may be carrying on a business. The more services you provide, the greater the chance that your rental operation is a business.” (CRA Source)

  3. Claim Expenses – An expense is deductible if it was necessary to earn income. You should keep all receipts or have a hand-written receipt made up if the supplier doesn’t already have one. Here are the basic categories of expenses for Rental Income:
    • Advertising
    • Insurance
    • Interest – On a mortgage or loan
    • Office expenses
    • Legal, accounting, and other professional fees
    • Management and administration fees – Strata fees or Property Management
    • Maintenance and repairs – Soap, towels, linens, cleaning supplies, lightbulbs, appliance repair, painting, replace flooring, etc.
    • Property taxes
    • Travel – Flights, ferry, hotel, and meals if you had to travel to the unit for maintenance or another related reason.
    • Utilities
    • Motor vehicle expenses – I recommend keeping a mileage logbook for business use of your personal vehicle. Details should include date, destination, round-trip km, and reason for trip.
    • Other expenses – For example, housekeeping service, landscaping, security, etc.

For more information on GST taxable rentals and situational examples, see http://www.cra-arc.gc.ca/E/pub/gm/19-2-2/19-2-2r-e.html.

Until next time!

-Alicia Loewen, Coastal Tax

Related posts: The Basics of GSTHow to File Your Taxes Without Leaving the House in 5 Easy StepsHow To Start Your Small Business Bookkeeping Off Right