Verified FBN Member (ND)
General

Tax burden

Hey Guys, it's looking to be the first year in a while that I'll have a profit on the farm. Especially being that I've had 1.5 years worth of harvests this year.

I've been reading a little about bonus depreciation and what not. I don't really want to buy a new pickup and I'm not necessarily dying for any equipment on the farm.

Other than prepaying expenses, what year end strategies do you guys have to decrease your tax burden?

Verified FBN Member (TX)
(edited)

Some of that depends on how your farm operation is set up. For example, if you are a sole proprietor you might be able to file using income averaging which takes into account your tax returns / taxable income for the last 1-3 years and averaging certain fields over those years.

* A really good accountant is well worth the money.

Verified FBN Member (OH)

Have the elevator hold your grain check until after the first of the new year.

Verified FBN Member (ND)

Just my opinion, but you may consider paying a little more tax this year if you don’t really need anything. I suspect the 12% tax bracket may disappear soon. At least go back to the 15% it was prior to the tax cuts. So, maybe bite the bullet this year and lower next years taxes with any depreciation/expenses.

What do the rest of you think?

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