Farm Taxes

Mid West Crop Tour – Tuesday

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August 19th, 2014

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 […]

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Sale of Gifted Grain Can Be Tax Free

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August 13th, 2014

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. […]

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Three Years is the Normal Statute of Limitations, But Not Always

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August 12th, 2014

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 […]

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How Does Section 179 Work?

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August 11th, 2014

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 […]

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Cotton Transition Assistance Program Enrollment Begins Next Week

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August 8th, 2014

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 […]

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Another Conservation Easement Tax Court Case – Mostly in Taxpayer’s Favor

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August 6th, 2014

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 […]

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IRS Provides Two Optional Methods for SE Health Insurance Deduction

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August 5th, 2014

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% […]

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Commodity Wages Save Payroll Taxes for Kids Too!

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July 31st, 2014

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 […]

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Issuing a Fraudulent Form 1099 Can Cost You Money

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July 31st, 2014

When a farmer makes certain payments to service providers and other vendors, they are normally required to issue a Form 1099 if the total amounts paid exceeds $600 in a year.  Normally, this is a very straight-forward process, however, if the farmer willfully files a fraudulent form 1099, the penalty for this can be very […]

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Pay Your Kids; It Saves Taxes!

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July 31st, 2014

We had a reader ask the following questions: “Have a good understanding of payroll taxes on payroll paid to a child under 18 working in the operation. The laws are not very concise in my situation. Currently my parents and myself are 1/3 owners of a LLC taxed as a partnership. I am divorced with […]

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