Farm Leadership
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What About Those 1099s?!
Almost fully back from the rigors of Tax Season, it is now time to start posting on our more usual basis. We got the following question from one of our readers in response to our post on using deferred payment contracts. “What about the 1099 that you would receive from the elevator that would show […]
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Our Readers Catch Us!
In our post yesterday on the deferred payment contracts, we had indicated that there were six different combinations of income that could be reported using the three contracts shown. A couple of very observant readers had indicated we had missed one. The one missed was that all three contracts could be reported in 2013. Therefore, […]
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Here We Go Again!
It seems like it was only three months ago that we had a new law making the lifetime estate tax exemption $5.0 million indexed to inflation ($5.25 million in 2013). Wait! It was only three months ago. President Obama today release a 2014 budget proposal calling for changes to this “permanent” law. Beginning in 2018, the […]
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3%-6%-12%
One of our last posts indicated that the IRS had issued a notice indicating they might not assess the late payment penalty for returns that are extended and paid after April 15, 2013 if the return included certain forms that were delayed by the new tax law. However, when you read the fine print, it […]
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The Two Week Check List
There are officially two weeks until April 15 to get your taxes filed (unless you elect an extension). If you have not filed yet, here is a check list of things to do between now and then: Fully fund IRAs for you and your spouse. Fund your retirement plan (KEOGH, SEP, SIMPLE). Even if you […]
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You Can Always Do An IRA!
About 20 years ago Congress passed a law that still provides confusion to both taxpayers and many members of the media. Many people thought the new law outlawed IRA contributions if you were covered by a retirement plan at work. Assuming you have sufficient compensation or self-employment earnings, the law simply disallowed the deduction if […]
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Heads They Win – Tails You Lose
This is the first year of the new .9% increase in Medicare tax based on earned income being higher than a threshold amount ($200,000 single/$250,000 married). If your wages exceed the threshold amount the extra Medicare tax will be withheld by the employer. Earned income includes both wages and net earnings from being a self-employed farmer. […]
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What Are W2 Wages for DPAD?
One of the bigger deductions that farmers qualify for is the Domestic Production Activities Deduction (DPAD). In brief, the farmer is allowed to deduct 9% of their net farm income (in some cases this may be very limited if all of the farm products are sold through a cooperative). This 9% deduction has a limit […]
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Farmers Should Be Able to File Tax Returns by Monday
The IRS announced today that most if not all of the forms waiting to be released should be final and ready for processing by Monday. Some software providers may be ready a few hours earlier, but we are guessing that all should be ready on Monday. If you file on or after Monday, you are not required […]
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Must Have W2 Wages to Deduct DPAD
We got this question from a reader today: “Can the amount I contribute to my solo 401k as deferred compensation be used as wages when figuring the domestic production activities deduction? I have no other wages.” Several years ago Congress placed into law a Domestic Production Activities Deduction (DPAD) that was primarily in response to […]