Farm Leadership
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Where Do We Deduct Our Health Insurance Premiums?!
One of our readers asked the following question: “Self employed health insurance deductions: does is apply to schedule F, schedule 1040 or both? Will I be able to deduct my health insurance on both my 1040 AND my schedule F or will I have an option of either schedule, or is it schedule F only […]
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Lower Income Farm Hands Lose Money on New Tax Bill!
The Tax Relief Act passed last week provided for a 2% reduction in the employee’s portion of the FICA tax. This dropped the tax rate from 6.2% to 4.2% for 2011 only. For individuals making more than $20,000 in salary or net farm income, this is an actual net tax decrease. However, for farm hands […]
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A Trade-In Can Cost You $15,000 in Tax!
Many farmers mistakenly assume that if they have a used piece of farm machinery and they want to get a newer piece to replace it, that a trade-in always saves them money at tax time. However, in many cases, this is not true and in fact, can cost the farmer up to $15,000 in self-employment […]
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Help, When Should I Sell My Land?!
A reader just sent us the following question: “If I had a parcel of farmland for sale, would I benefit by selling it this year 2010 or 2011? I was wondering how capital gains tax would affect what I would pay for both years?” With the passage of the Tax Relief Act of 2010 late […]
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When is Land Rent Reported as Income?
We had a reader send in the following question: “We own farm land in Iowa. Last half rent has not yet been received though contract states last half to be received by landlord on December 1. If rent moneys are not received until January of 2011 is rent properly reported on tax return as 2010 […]
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Senate Should Pass 2010 Tax Relief Act Today!
The Senate is expected to pass their 2010 Tax Relief Act today and then pass it onto the House for their review. The only expected snag in the House is related to the Estate Tax portions of the bill. Some of the more liberal House Democrats do not want to raise the lifetime exemption to […]
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Coordinate your Section 179 Deduction with Bonus Depreciation
With the large increase of Section 179 deduction for 2010 and 2011 to $500,000 and 50% bonus depreciation on new assets in 2010 and possibly 100% in 2011, it is now even more important for your tax planning to coordinate these two deductions. Here are the important rules to remember: Section 179 deduction is available […]
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Which 2010 Estate Tax Election will you Make?!
One of the benefits of the proposed Tax Relief Act may apply to any estate arising in 2010. Under the proposed rules, the estate can elect to either be: Taxed under the current 2010 rules (no estate tax, but limited basis adjustment to fair market value), or Use the new proposed 2011 rules (possible estate tax, […]
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A Deal is Struck on Tax Package
President Obama and the Republicans struck a deal yesterday on a extension of the Bush tax cuts for another two years along with many other “goodies”. If enacted, the deal will provide the following: Extension of the top tax rate of 35% for 2011 and 2012. Top capital gains and dividends tax rate of 15% […]
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When Do We Have to Issue 1099 or W2 to Relatives?
One of our readers wrote in the following question: “How much can I pay grandchildren without generating 1099 or w2 ?” This is a question that we seem to get periodically throughout the year and the answer depends on what type of services are being performed. If a grandparent (or parent) is having a grandchild […]