Farm Leadership
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Prevent Planting Qualifies as “Crop Insurance”
We got the following question from one of our readers: “Are payments for prevented planting deferrable into the following year for income tax?” Most farmers are aware that crop insurance proceeds can be defer to the following year if you meet the following basic qualifications: You use the cash method of accounting; You receive proceeds […]
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FICA Wage Base is Going Up (and Up and Up)!
In the annual report by the Social Security Administration Chief Actuary is an estimate of the top Wage Base for 2014 through 2022. For 2013, the Wage Base is $113,700. The 6.2% FICA tax applies on all earnings up to this amount. Once you reach the threshold amount, the remaining earnings are subject to the Medicare […]
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Update on Commodity Gifts
We got a couple of comments/questions regarding our previous post on commodity gifts. First, “For a cash basis farm taxpayer, I was under the impression that care must be taken to assure that crop is gifted after the year in which the crop was grown. Otherwise, costs to create the crop need to be backed […]
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The Advantages of Commodity Contributions
We had a reader ask the following question: “Please comment on the tax ramifications of gifting farm commodities to a charitable foundation.” Many farmers have charitable intent, but in many cases their standard deduction ends up greater than their itemized deductions including their charitable donations. In these situations, the farmer can get an extra advantage […]
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Pay Your Kids!
One of my favorite memories of my childhood is riding the combine with my dad every harvest season. A very early slides shows me sitting on my father’s lap sound asleep on his 1950 era Massey Ferguson combine. This combine only lasted one harvest season since it was not a Hillside model. He upgraded to an […]
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Corn & Bean Prices Are Approaching the Spring Price
As I type this post, December corn futures are currently trading at $5.59 and November beans futures are at $12.84. Both of these prices are within a few pennies of the spring price that was set based on the average February prices of these futures contracts ($5.65 and $12.87, respectively). It is interesting that after […]
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When Does A Large Price Increase Spell Trouble?
The Kansas City Federal Reserve 4th quarter survey of Ag conditions spotlighted an ever upward trend in farm land prices. On a year-over-year basis, irrigiated farmland in Kansas, Nebraska and the Mountain states all saw increases over 30% and non-irrigated land increased by more than 20% in all states. For the last two plus years, land […]
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Get Your Message Out!
I spent today in Spokane attending the Washington Bankers Association agriculture conference. I gave an update on the possible new farm bill provisions along with an update on the new tax laws. After I spoke (never a good thing to give the farm bill and tax update right after lunch) Alex McGregor of The McGregor […]
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Full Season vs. Early Season Corn
I spent most of today with Chris Barron at his farm (we thought we would be planting but with a temperature holding steady at 37 degrees not much planting is going on). Part of the time Chris and I were discussing the effect of planting full season corn in a late planting year and the […]
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Don’t Forget Your Retirement Plan
I was talking with a new farm client the other day about his estate plan and what struck me the most was not how much farm land value he had accumulated but rather the amount he had tucked away into his retirement plans. This amount was over 6 figures and he had only been contributing […]