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Farm tax planning

December 26, 2008
From WAYNE SCHOPER Brown/Nicollet Extension Educator

We are at the end of another calendar year and for most farmers this means the end of another income tax year. We have had a couple of good income years for farmers and this is where good tax planning and working with a good set of farm records can come in very handy. Many farmers in our area work with the farm business management instructors that we have in our area. Although there is a fee involved for their services, in my opinion, this is some of the best money that a farmer can invest in. This means that he or she is getting another set of eyes looking at their farm financial situation and another look and comparison of their farm to other like operations in the area. But one of the real values is assistance in income tax planning and preparation. Decisions of whether or not to take the rapid depreciation available under Section 179 or the 50% Bonus Depreciation options can be made at the time that you are completing your tax return. Funding an IRA is another important decision that does not have to happen until April 15th, 2009, so sales made in 2009 can provide the funding for the 2008 contributions. Purchases and sales that you want to include on your tax return need to be done by December 31st.



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