Farm Taxes

  • A Deal is Struck on Tax Package

    President Obama and the Republicans struck a deal yesterday on a extension of the Bush tax cuts for another two years along with many other “goodies”.  If enacted, the deal will provide the following: Extension of the top tax rate of 35% for 2011 and 2012. Top capital gains and dividends tax rate of 15% […]

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  • When Do We Have to Issue 1099 or W2 to Relatives?

    One of our readers wrote in the following question: “How much can I pay grandchildren without generating 1099 or w2 ?” This is a question that we seem to get periodically throughout the year and the answer depends on what type of services are being performed. If a grandparent (or parent) is having a grandchild […]

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  • IRS Announces 2011 Standard Mileage Rates

    On Friday, the IRS published their standard mileage rates for 2011.  These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical and moving purposes.  The 2011 rates are: 51 cents per mile for business miles driven 14 cents per mile for charitable purposes 19 cents per mile for […]

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  • IRS Adds New Form For Health Insurance Credit

    The IRS has released final guidance for claiming the new health insurance premium credit on your tax return for 2010, along with new Form 8941 (Credit for Small Employer Health Insurance Premiums) and related instructions.  Remember that if you employ 10 or less farm employees and their average pay is less than $25,000, you can get […]

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  • Does a Machine Shop Qualify for Section 179?

    We had a reader just send in the following question: “We have built a machine shed with part of it closed in as a farm shop. This part will receive concrete, electric, heat, etc. I have been told this qualifies under the section 179 deduction. Is that correct? “ This is an area of the […]

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  • Optimize Your Section 179 Deduction!

    Farmers with larger profitable operations have an unique opportunity this year and next year to have substantial tax savings.  The Small Business Jobs Act passed earlier this fall increased the Section 179 deduction from $250,000 to $500,000 for this year and 2011.  As most farmers know, Section 179 allows you to deduct up equipment purchases […]

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  • Don’t Let AMT Bite You

    Now that it is the first day of December, we must make sure that our year-end tax planning is in full gear.  Over the next few weeks, I will post various items related to year-end tax planning that you need to review and deal with now. First, many farmers assume that the alternative minimum tax […]

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  • How Will You Transfer the Farm?!

    I ran across another thought provoking article in Cornhusker Economics.  In the article, they performed an analysis of farmers in Nebraska based upon their ages. In 1982, 13,436 farmers in Nebraska were under age 35.  In the most recent census in 2007, this number had dropped to 3,353 or a 75 percent decrease. The number […]

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  • Betterment – Why Does That Cost Me Money?

    We had a reader ask the following questions: “We had a combine fire this fall, and my question is concerning “betterment” deducted from the claim. The combine was a 2010 model, with only 400 hours on it. The damage exceeded $41,000, and the insurance company deducted $4,100 (10%) for “betterment”. I assume that I can deduct […]

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  • December 31, 2010 – Date to Make Taxable Gifts

    With the expected large increase in gift and estate tax rates for 2011, December 31, 2010 is the key date to make any large taxable gifts. Currently, the maximum gift tax rate is 35% and it will rise on January 1, 2011 to 55%.  There is no estate tax for 2010, but in 2011, the […]

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