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My Trip to the Midwest
I flew into Kansas City on Thursday for three meetings on Friday with some of our farm clients. These meetings were productive, but the best part of the trip was on Saturday when I traveled from Kansas City to near Westboro, Missouri which is almost on the Iowa border. I met one of our farm […]
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Your CRP Income May Be Subject to SE Tax
In the Morehouse Tax Court case just issued yesterday, the court ruled that the receipt of CRP payments by a non-farmer are subject to self-employment taxes. The case involved a taxpayer located in Minnesota who inherited property in South Dakota and continued to invest in additional farm land in that state. At all times, the taxpayer never […]
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Are You Ready for Your $1 Excise Tax Filing Requirement!
Many farmers have taken advantage of a self-insured medical reimbursement plans or other similar plans. In many cases, a farmer is able to deduct medical expenses that they might otherwise not deduct due to the 10% of AGI limitations or they do not itemize their deductions. As part of the Affordable Health Care Act (ObamaCare), […]
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Day 1 at Traverse City
I am in Traverse City yesterday and today putting on a joint farm tax update for about 65 CPAs with three other CPAs from around the country. Yesterday was an update on farm income tax planning and whenever I give a presentation like this I always worry about running out of things to say. As usual, […]
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ACRE Produces Higher Payouts Than New Farm Bill Proposals
Gary Schnitkey of the University of Illinois just released an excellent analysis of the projected crop payments under the old ACRE program or the proposed Senate ARC or House RLC or House PLC programs. As most know, under the old Farm Bill, a farmer could elect to participate in the ACRE program in return for […]
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Prevent Planting Qualifies as “Crop Insurance”
We got the following question from one of our readers: “Are payments for prevented planting deferrable into the following year for income tax?” Most farmers are aware that crop insurance proceeds can be defer to the following year if you meet the following basic qualifications: You use the cash method of accounting; You receive proceeds […]
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How Do We Treat The Grain Gifted?
Following up on our post regarding gifts of commodities to children and grandchildren, we had a reader ask the following question: “In your example of Eric gifting to his grandson, does the grandson have to report this gift as income in either case (gifting in the current crop year or the following year)?” In general, […]
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FICA Wage Base is Going Up (and Up and Up)!
In the annual report by the Social Security Administration Chief Actuary is an estimate of the top Wage Base for 2014 through 2022. For 2013, the Wage Base is $113,700. The 6.2% FICA tax applies on all earnings up to this amount. Once you reach the threshold amount, the remaining earnings are subject to the Medicare […]
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Update on Commodity Gifts
We got a couple of comments/questions regarding our previous post on commodity gifts. First, “For a cash basis farm taxpayer, I was under the impression that care must be taken to assure that crop is gifted after the year in which the crop was grown. Otherwise, costs to create the crop need to be backed […]
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The Advantages of Commodity Contributions
We had a reader ask the following question: “Please comment on the tax ramifications of gifting farm commodities to a charitable foundation.” Many farmers have charitable intent, but in many cases their standard deduction ends up greater than their itemized deductions including their charitable donations. In these situations, the farmer can get an extra advantage […]
