December, 2010
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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 […]
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IRS Announces 2011 Standard Mileage Rates
On Friday, the IRS published their standard mileage rates for 2011. These rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical and moving purposes. The 2011 rates are: 51 cents per mile for business miles driven 14 cents per mile for charitable purposes 19 cents per mile for […]
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IRS Adds New Form For Health Insurance Credit
The IRS has released final guidance for claiming the new health insurance premium credit on your tax return for 2010, along with new Form 8941 (Credit for Small Employer Health Insurance Premiums) and related instructions. Remember that if you employ 10 or less farm employees and their average pay is less than $25,000, you can get […]
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Does a Machine Shop Qualify for Section 179?
We had a reader just send in the following question: “We have built a machine shed with part of it closed in as a farm shop. This part will receive concrete, electric, heat, etc. I have been told this qualifies under the section 179 deduction. Is that correct? “ This is an area of the […]
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Optimize Your Section 179 Deduction!
Farmers with larger profitable operations have an unique opportunity this year and next year to have substantial tax savings. The Small Business Jobs Act passed earlier this fall increased the Section 179 deduction from $250,000 to $500,000 for this year and 2011. As most farmers know, Section 179 allows you to deduct up equipment purchases […]
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Don’t Let AMT Bite You
Now that it is the first day of December, we must make sure that our year-end tax planning is in full gear. Over the next few weeks, I will post various items related to year-end tax planning that you need to review and deal with now. First, many farmers assume that the alternative minimum tax […]