Profit Center
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How a Tax Credit Works
A reader on the Agweb.com site left an interesting comment about my posting on the Ag Security Credit. His question was whether an income tax credit needs to be recorded as income in the year after you take the credit. The answer in almost all cases is no. If a farmer takes a business tax […]
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Energy Credit Applies to Farmers Too
In preparing income tax returns this tax season, I am seeing a lot more of the non-business energy property credit being taken on taxpayers returns. This credit is for the installation of exterior doors and windows, insulation and related materials to make a home more energy efficient. The credit is allowed for 30% of the […]
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The Patient Protection and Affordable Care Act (Health Care Act) – Tax Provisions
My good friend Scott Heintzelman of The Exuberant Accountant recently posted a summary of the information on the new Health Care act that passed Sunday night and I thought I would post the same summary since this new Act will affect all of us as Americans and as farmers. Premium Assistance Credit The act provides […]
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$70,000 of Taxable Income Equals Zero Tax
There is about a month left before the April 15 tax filing deadline (except for those people who file extensions) and one of the nice tax benefits still available this year is the long-term capital gains rates for those taxpayers in the normal 15% tax bracket and lower. For those taxpayers, the net capital gains […]
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Alan Kluis of Sucessful Farming has a very good article on marketing and lock in in your crop insurance plans for the upcoming crop year. In the article, he indicates you need to allocate your bushels between insured bushels (A bushels) and non-insured bushels (B bushels). On the insured bushels, you need to meet with […]
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What’s Your Farm Ratios
As advisors, we see many business and farm financial statements through out the year. Most of the successful farm businesses have several key financial ratios in common. Even though each farm business is different, it is surprising how these ratios tend to be in the same range for each business. These key ratios that […]
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Minimize Your Fixed Cost Amortization to Maximize Your Profits
To maximize your profit for your farm, it is very important to determine what your annual fixed costs are and determine if you are maximizing your amortization of these costs on your farm. Fixed costs are those costs that do not materially change with production increases and decreases. Some examples of fixed costs are: […]
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Lack of Data Dooms GRIP & GRP in 1000+ Counties
Marcia Taylor with DTN/The Progressive Farmer had a great post recently on the elimination of crop insurance under the Group Risk Income Protection (GRIP) and Group Risk Program (GRP) in over 1,000 counties across the US. The primary reason for eliminating these counties were due to not reporting at least 30 yield reports or 25% […]
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Hog Plant Closing = Higher Hog Prices?
Does the recent announced closing of the hog plant located in Sioux City, Iowa mean that hog prices will increase during 2010. First, the closing will directly impact 1,500 workers and their families in the area. Some of them may find work at other plants located in the area, but many will need to find […]
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What’s Your Basis
I am a firm proponent of using hedges to lock in your cost of production when you can. However, you must not just look at what your commodity price is trading at on the relevant exchange. You need to determine what your basis is and how it compares to the historical trends. Basis is the difference between […]