Farm Industry Trends
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We Wonder What the Investment Income Tax Form Will Look Like
Several of our posts have discussed the new 3.8% net investment income (NII) tax created by the 2010 Health Care Acts that will apply starting in 2013. The IRS has issued proposed Regulations on how to calculate this tax and needless to say, these Regulations are long and complex. After reviewing the Regulations, it appears the […]
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Section 179 Can Create a Farm Loss (In Certain Cases)
We got the following question from one of our readers: “Is it true you can only deduct Section 179 in the amount of your farm income remaining after other deductions? In other words you can not have a loss because of 179 depreciation? If the Section 179 deduction is more can you carry it over […]
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Don’t Forget The Double Payroll Tax Hit!
Many farmers are aware that the FICA rate for employees (including their employee portion, if self-employed) has gone back to the old 6.2% which is up 2% from the temporary reduced 4.2% rate for 2011 and 2012. This increase applies on wages as paid and will also apply on any self-employment income paid with the […]
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IRS Announces When Returns Can Be Filed
The IRS just released a notice announcing that processing of returns will commence on January 30, 2013 for most individuals. More complex returns will not be accepted by the IRS until late February or even into March, 2013 due to the complex changes to the IRS software system caused by last week’s new tax law. The notice mentioned […]
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Reprieve For S Corporations With Built-in Gain
Many farmers had C corporations with very low basis land in them. As discussed in several posts, corporations with land face a double tax that in many cases can exceed 65% of the value of the land sold by the time the money from the sale is distributed to its shareholders. One of the options […]
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Fiscal Cliff Tax Bill May Increase Divorce Rate!
Congress created laws several years ago to mitigate the effect of married couples paying a higher tax than two single people living together. The extra tax was commonly known as the “marriage penalty”. The Fiscal Cliff Tax Bill passed last week has brought this marriage penalty back into existence and it appears to be even greater than […]
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Up to Ten Capital Gains Tax Rates for 2013!
After reviewing the various phase-outs of itemized deductions and personal exemptions based upon gross income plus the implementation of the new 3.8% investment surtax, for 2013 there now at least 10 different possbile maximum long-term capital gains and qualifying dividends tax rates. The rates range from zero for that portion in the 10-15% tax bracket […]
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Section 179 / 50% Bonus Depreciation
Due to the passage of the new tax law this week, we have gotten several questions about Section 179 and bonus depreciation. A couple of questions are as follows: “Can you please expand on the extension of section 179? For 2012, will the limits remain at $139,000/$560,000 or do they increase to $500,000/$2mil. For 2013, […]
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Some More Goodies Buried in the Fine Print
Included in the tax bill passed this week were some additional tax “goodies” for both farmers and non-farm taxpayers. In previous years, taxpayers over age 70 1/2 were allowed to contribute up to $100,000 each year to a qualified charity and not have it count as income. The amount given to the charity was not […]
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Help! What Is My Capital Gains Tax Rate?!
We are continuing to digest the new tax bill (assuming President Obama signs it today). One of the unique features in this tax bill is, that for many taxpayers, they will not accurately know their capital gains (or qualified dividends) tax rate until they prepare their tax return. In brief, we know the following for […]