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Keep business and personal finances separate

Reference: FCC

Separate your farm business and other finances to better understand your operation’s performance and remove unnecessary headaches from the tax season.

“It’s good business practice, and it’s good personal finance practice,” says Vanessa Stockbrugger, founder of Womencents.

Mingling finances only complicates things and misses getting a clear picture of how your farm and household are running, she says.

Prevent blending
One of the best ways to keep your business and personal finances separate is to have separate bank accounts and credit cards, says Erich Weber, business finance specialist with Ontario Agriculture, Food and Rural Affairs.

He also recommends separating assets, ensuring farm assets are under the farm name, while personal assets are kept in your personal name.

Other income
Financial mingling can also be an issue for those generating outside income.

When working off-farm, tax deductions are taken off every cheque, with the net amount ideally going into your personal account, Stockbrugger says. But if it winds up in the farm account, you can’t know where you’re drawing money from, she adds.

Issues also could arise during tax season when you’ll need clarity on how revenue will be taxed, adds Manitoba Agriculture farm management specialist Sharon Ardron... Read More