Last updated: August 31 2011
According to Stats Canada Report, Principal Field Crops, prairie farmers anticipate a record harvest of canola this year, as well as higher volumes of barley, oats and wheat compared with 2010. However, farmers in Ontario and Quebec anticipate a smaller crop of corn for grain in 2011. Year end tax planning can be important this year, to take these issues into account, and minimize the anticipated tax before the December 31 instalment payment for the year is due.
For example, RRSP planning, family income splitting and a review of available loss carry forward options should be taken into account. Mandatory and optional inventory provisions may also play a role in averaging income levels.
When it comes to the December instalment payment, most taxpayers know that when they fall into an instalment profile, they will receive a regular billing notice from CRA reminding them about this, based on their taxes payable of the immediately prior two years.
Trouble is, if income has fallen since then, instalments may no longer be necessary. Yet many people keep paying the request for instalments sent by the CRA, instead of using or investing that extra money for themselves.
Good news: taxpayers can request an adjustment to change instalment remittances by asking their tax or financial advisor to write a letter to CRA to request instalments be calculated under one of two other options:
Taking control of the taxes paid on earnings is the first step in controlling more of your cash flow so that you can actually have the money to pay your bills and make investments, too.