Farm Industry Trends
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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 […]
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180 Months Means 180 Months!
The US Tax Court on Monday, October 21, 2013 released another Case that I found interesting. In Estate of Helen Trombetta vs. Commissioner, the Tax Court essentially ruled creating a grantor trust with retained interests having a term of 180 months, you better make sure you live for at least 181 months if you want to save […]
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Is Your Contract Labor Really Wages?!
I came across an article in Accounting Today recently discussing states clamping down on misclassified employees (Independent Contractors v. Employers). While this article focuses on the construction industry, it certainly applies to the agriculture industry as well. Basically, what the employer v. independent contractor boils down to is who is required to pay employment / […]
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Taxpayers Want Their Cake, Frosting and Candles!
In a Tax Court case issued on Monday, October 21 (Van Alen and Tomlinson vs. Commissioner), we find taxpayers who inherited farmland property subject to a Special Use Valuation adjustment under Section 2032A. This adjustment allows an estate to elect to reduce the value of the land from its “true” fair market value downwards to […]
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IRS Releases List of Counties Eligible for Another Year of Livestock Deferral
Each year the IRS releases a list of those counties affected by drought in the US. This list is used by ranchers to determine if they have an additional year to defer the gain from selling excess livestock due to drought. Section 1033 allows ranchers a four-year period to reinvest proceeds from the sale of […]
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Watch Out for Distributions from Coops
While recently working with a client, I came across a situation I typically do not deal with on a routine basis: non-qualified patronage distributions from a cooperative. A qualified distribution is treated as a deduction on the cooperative return and the producer picks up the income amount. On the contrary, the cooperative does not get […]
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2012 Tax Season Officially Bites the Dust
Most farmers are used to a March 1 tax filing deadline. However, for many other farmers and other taxpayers, the final individual tax deadline is not April 15 but rather October 15. And like many of us from our school days, there are certain taxpayers that like to procrastinate (and procrastinate and so on). As usual, […]