Farm Taxes
-
One-Third of Americans Lack Retirement Savings
I came across this article recently and it highlighted a retirement savings issue many people face, especially those that are self-employed. “Many U.S. households are not adequately prepared for retirement, according to a new report from the Federal Reserve that found 31 percent of non-retired respondents indicating they have no retirement savings or pension, including 19 […]
-
More than 100 but Less than 500
When a farmer or taxpayer owns an S corporation that incurs a loss, the farmer must show that they have materially participated in the companies operations in order to deduct the loss. The slam dunk test is that the owner works for more than 500 hours. If the owner works for less than 100 hours, then […]
-
Mid West Crop Tour – Tuesday
Today was a tale of two states. We started in Indianapolis area and went due west to the Illinois border taking six corn and bean samples in Indiana. We had two low samples in the 170 range, two in the 210 range and finally two in the 250 range for an average of 210. This […]
-
Sale of Gifted Grain Can Be Tax Free
We had a reader ask the following question: “We want to gift our daughter (she is not a dependent) some grain that is from the 2012 growing season. We plan to have the elevator issue her a contract to show ownership and then she can call them and sell the grain when she is ready. […]
-
Three Years is the Normal Statute of Limitations, But Not Always
I get a phone call or email many times during the year asking how long a taxpayer needs to keep documents. The answer is “it depends” as is usually the answer for all tax questions. The IRS generally has three years from the due date of your tax return to assess additional tax. Therefore, if […]
-
How Does Section 179 Work?
A reader sent us the following question: “I am wondering how many dollars worth of used machinery I can purchase and use for 2014 income deduction. I do not understand Section 179.” I get this question fairly often especially regarding how much Section 179 farmers can use for 2014. The current law is that a […]
-
Cotton Transition Assistance Program Enrollment Begins Next Week
The USDA announced today that the cotton transition assistance program (CTAP) enrollment will begin next week. The 2014 Farm Bill provided cotton growers with a new Stacked Income Protection Plan (STAX) beginning with the 2015 crop year. Since this program is not in place for the 2014 crop year, there will be a cotton transition […]
-
Another Conservation Easement Tax Court Case – Mostly in Taxpayer’s Favor
There are multiple Tax Court rulings on conservation easements each year. In the Schmidt v. Commissioner case issued today, the Tax Court ruled mostly in favor of the taxpayer, but not totally. The Schmidt’s lived in Colorado for many years and purchased about 40 acres of land in northern El Paso County. They attempted to […]
-
IRS Provides Two Optional Methods for SE Health Insurance Deduction
Self-employed farmers are allowed to deduct their health insurance premiums in arriving at their adjusted gross income (AGI). However, beginning in 2014, many of these same farmers will also be eligible for a premium tax credit based upon their income. The premium tax credit is on a sliding scale and phases out at a maximum of 400% […]
-
Commodity Wages Save Payroll Taxes for Kids Too!
In my previous post today, I had recapped the wages paid to children being exempt from payroll taxes in certain situations. In the case presented, the wages in fact, were subject to payroll taxes. The one item I had forgotten to mention is that if commodity wages were paid to the children in any of […]