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Update to Social Security Post
Just a couple of items to add to our Social Security Post of yesterday. First, if the farmer’s spouse works outside of the farm and has made a substantial amount of money during their career, then it may not make sense for the farmer to pay any more into the system. A retired person is […]
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When It Pays to Increase Your Earnings
We get this question from farmers approaching retirement age a lot: “I have had very low income for most of my career and should I try to maximize my income as I approach retirement to increase my social security benefits” Chris Hesse, who is one of my partners at CliftonLarsonAllen, LLP had provided me with […]
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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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IRS Announces They Are Processing All Remaining Tax Forms
The IRS announced today that they are now accepting all 2012 related tax forms. Since it seems like we have had 100s of tax returns backing up in our office waiting for this announcement, this is welcome relief for CPAs and other tax preparers. One of the negatives we are now certain to get multiple […]
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When an UPREIT Might Make Sense
Many farmers have seen substantial appreciation in their farmland values over the last decade. Many of these farmers are approaching retirement age and would like to “cash” in on these values and diversify their holdings. They do not have any children to take over the farm and are worried that values in their immediate area […]
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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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How Step-Up In Basis Works
We received this question from one of our readers yesterday: “With my husband passing away in October 2012, I have sold the cattle & much of the farm equipment. Now wondering how all will fall out as relates to depreciation. Obviously, the sale price was less than when purchased new. Ex: Used 90 Dump Truck […]
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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 […]
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Safe to File After March 1
Although we posted on this subject already, we have received multiple questions from readers and other CPAs regarding filing after March 1. As of the time of this post, there are most likely at least two major forms that the IRS has not yet released that will directly affect most if not all of our […]
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Good News for Blackberry, Raspberry and Papaya Farmers
For farmers who raise certain crops with a longer pre-productive life (over two years) such as apples, oranges, and other similar plants, one of the tax rules under Section 263A require all of the costs associated with planting and growing this crop until it reaches economic production to be capitalized and then depreciated over ten years. […]
