Farm Operations
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All Time Low Interest Rates!
The IRS just issued Revenue Ruling 2012-2 which lists the Applicable Federal Rates for January, 2012. These are the minimum interest rates that you must charge on related party loans such as a loan from a parent to a child or a shareholder to their corporation. For short-term loans, this interest rate is only .19%. […]
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Is it 15, 16, 17 or even 18?
One of the hardest things to keep track of as a CPA who prepares income taxes is “What is the due date of your tax return, income tax estimates and other due date?”. Normally these due dates fall on the 15th of a month. However, if the 15th is a Saturday, Sunday or federal holiday, […]
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Estimate Payment – Update
With January 16, 2012 being less than two weeks away, I thought I would update our farmers on their estimated tax requirement and give some examples. As we have previously posted, most farmers work very hard to get their income taxes filed by March 1 of each year since as long as they file their return […]
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Crop Insurances Proceeds – Update
An alert reader let me know that one of my points on how to defer your crop insurance proceeds was not written as well as it could have been. In my original post, I had indicated that each crop is a “separate” business unit, then each crop is looked at separately. This separate business unit […]
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When Do I Report My Crop Insurance Proceeds?
We had a reader ask the following question: “I was flooded on one farm & hailed on another so received multi-peril income this year. How much of our MPCI can be deferred?” Without knowing all the facts here, we can give general advice on how much crop insurance proceeds can be deferred from one year […]
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Payroll Tax Cut Extended For Two Months – Sortof!
President Obama signed late yesterday a new law extending the payroll tax cut for the first two months of 2012. This means for January and February 2012, the employee’s portion of the FICA tax will be 4.2% instead of the normal 6.2%. For self-employed farmers, for net SE farm income up to $18,350 shall be […]
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Use a CRT for Retirement Income – Updated
In my post yesterday, I need to clarify one tax aspect of the post. When a farmer contributes all ordinary income assets such as unsold grain, farm equipment, etc. the deduction that the farmer may get is limited to his cost basis in the assets. Since unsold grain for a cash basis taxpayer has a […]
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Use a CRT for Retirement Equipment Sales
We had a reader ask the following question: “Is there any way to reinvest money from the sale of equipment(retirement) rather than pay ordinary income tax on it?” Most farmers when they retire have a large amount of income from selling the final crop and their equipment and many times very little expenses to offset […]
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Think About Paying a Tax Estimate on January 17, 2012!
With most farmers net income for 2o11 being most likely higher than 2010, you may want to consider paying a tax estimate payment on January 17, 2012 to give you until April 15, 2012 to file your return. Most farmers try to get their tax return filed by March 1 of each year. If a […]
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IRS Announces New 2012 Mileage Rates
The IRS announced this week the new standard mileage rates for 2012. Most of the rates remained the same as the last six months of 2011. For regular business use, the rate is still 55.5 cents per mile (don’t ask me where they came up with the half cent). For charitable purposes, the rate is 14 […]