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Crop Insurance Deferral Options
It appears that at least $5 billion of crop insurance claims have been processed this year and with the approximate $1.20 drop in corn prices from the spring, it is likely that additional corn claims will be made. Unlike last year when almost all claims related to yield losses, this year, most of the claims […]
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Update on the Net Investment Income Post
In our previous post, we gave an example of a farmer selling farm land that was cash rented out and it being subject to the new net investment income tax. This was designed an illustration, but we have gotten feedback that in many cases this 3.8% tax may not apply to a farmer in this situation. […]
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Everything You Want to Know About Net Investment Income Tax (or Not)
Tony Nitti does a regular column on Forbes.com and he just released a very good recap of the 3.8% net investment income tax that was implemented by Obamacare, but was not applicable until 2013. Many farmers assume this tax will never apply to them since their adjusted gross income will never be in excess of $200/250,000 […]
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Highlighted Inflation Adjusted Amounts for Farmers
The IRS just released Revenue Procedure 2013-35 last week updating all of the income tax items that are affected by inflation. Each year right after September 30 the IRS will release these items updated to reflect the annual inflation rate for the year ended September 30. The government is on a fiscal year that ends […]
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Some Thoughts on Section 179 & Bonus Depreciation
Farmers have gotten accustomed to high levels of Section 179 ($500,000 for the last few years) and at least 50% bonus depreciation since 2008. For 2013 the levels are $500,000 for Section 179 and 50% bonus, however, for 2014, Section 179 is scheduled to drop to about $25,000 and there will be no bonus depreciation. […]
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Calculating Cost Basis Wrong Can Be Costly!
The Tax Court case released the Moore vs. Commissioner case (T.C. Memo 2013-249) yesterday and this is a very good case of how some taxpayers who really should know better, still attempt to fight a losing cause with the IRS in the Tax Court. Here is a brief summary of the facts of the case: […]
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Social Security Announces 1.5% Increase in Benefits
On Wednesday, October 30, 2013, the Social Security Administration announced that benefits will rise by 1.5% beginning with January payment. This represents a $22.50 monthly increase for a recipient receiving $1,500 per month. This increase will apply to about 63 million Americans receiving benefits. The SSA also announced that the wage base will increase from $113,700 […]
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Setup Your Deferred Payment Contracts Now
Over the next few weeks we will post some year-end tax tips and today’s post deals with using deferred payment contracts. Since most Midwest farmers are in the midst of harvest right now, this is the time to think about setting up your deferred payment contracts for year-end tax planning. These contracts call for delivery […]
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Now Congress is Calling the IRS “Preposterous” (At Least the Delay)!
On October 23, 2013, Representative Dave Camp, Chairman of the House Ways and Means Committee sent a very strongly worded letter to the Commissioner of the Internal Revenue Service calling for an explanation of how the IRS could delay the start of the 2013 tax filing season. The letter strongly states that the IRS has […]
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Relief for Late Payment Penalties for 2012 Tax Returns
Most farmers are aware that the IRS allowed filing of their income tax return this year by April 15 instead of the normal March 1 “farmer” filing deadline. What many farmers may not know is if they extended their tax return and ended up paying additional income tax after April 15, they may not owe the […]
