The document provides an overview and updates on various tax topics for farmers, including depreciation, deferred grain contracts, prepaid farm expenses, taxation of easements, CRP and self-employment tax, federal tax estimates, and farm income averaging. It discusses changes to bonus depreciation and section 179 expensing and strategies for planning under uncertainty. It also reviews the tax treatment of various payments and provides examples and tips related to implementing different tax strategies.
The Tax Cuts and Jobs Act is a reality. Find out what that means to you in this informative presentation. Presented by Brian Kempf, Christopher Axene, Cindy Kula and Inez Bowie, this presentation focuses on the various business related provisions, individual provisions, international concerns and implications to estates and trusts.
Listen to the explaination behind the slides. Watch the full recording of this free webinar here --> https://register.gotowebinar.com/register/7354592984523668995
2018 Pennsylvania Tax Update: The State Budget, Legislation, and Multistate T...McKonly & Asbury, LLP
This webinar was hosted by McKonly & Asbury Senior Tax Manager and SALT Leader, Michael Eby, and Tax Supervisor, Lindsey Waltemyer.
It provides an overview of the enacted 2017-2018 Pennsylvania State Budget; a brief update on recently passed Pennsylvania tax legislation and court decisions of interest; and discusses how states, including Pennsylvania, are addressing these changes at the Federal level in their own respective tax structure.
The Tax Cuts and Jobs Act is a reality. Find out what that means to you in this informative presentation. Presented by Brian Kempf, Christopher Axene, Cindy Kula and Inez Bowie, this presentation focuses on the various business related provisions, individual provisions, international concerns and implications to estates and trusts.
Listen to the explaination behind the slides. Watch the full recording of this free webinar here --> https://register.gotowebinar.com/register/7354592984523668995
2018 Pennsylvania Tax Update: The State Budget, Legislation, and Multistate T...McKonly & Asbury, LLP
This webinar was hosted by McKonly & Asbury Senior Tax Manager and SALT Leader, Michael Eby, and Tax Supervisor, Lindsey Waltemyer.
It provides an overview of the enacted 2017-2018 Pennsylvania State Budget; a brief update on recently passed Pennsylvania tax legislation and court decisions of interest; and discusses how states, including Pennsylvania, are addressing these changes at the Federal level in their own respective tax structure.
2019 State Taxes: Pennsylvania Update and The Multistate Tax ClimateMcKonly & Asbury, LLP
McKonly & Asbury’s June webinar entitled, “2019 State Taxes: Pennsylvania Update and the Multistate Tax Climate” is hosted by Mark Heath, Partner and Director of Tax Services at McKonly & Asbury, and Lindsey Waltemyer, Tax Supervisor. During this webinar, attendees will gain an understanding of the budget provisions and recent tax updates specific to Pennsylvania; receive updates on how various states are reacting to federal tax changes and national trends in sales tax nexus; and receive updates from Harbor Compliance on foreign entity qualification and annual report requirements.
Income Tax Basics by Burnie Maybank, South Carolina Economic Development 101,...Nexsen Pruet
Burnie Maybank hosted the Nexsen Pruet Newbie Seminar on December 1, 2011. The Newbie Seminar is designed for those new to the economic development field in South Carolina or those who would like some brushing up. Covered topics included basic property, sales and income taxes, as well as Bonds, the utility tax credit and FOIA.
2019 State Taxes: Pennsylvania Update and The Multistate Tax ClimateMcKonly & Asbury, LLP
McKonly & Asbury’s June webinar entitled, “2019 State Taxes: Pennsylvania Update and the Multistate Tax Climate” is hosted by Mark Heath, Partner and Director of Tax Services at McKonly & Asbury, and Lindsey Waltemyer, Tax Supervisor. During this webinar, attendees will gain an understanding of the budget provisions and recent tax updates specific to Pennsylvania; receive updates on how various states are reacting to federal tax changes and national trends in sales tax nexus; and receive updates from Harbor Compliance on foreign entity qualification and annual report requirements.
Income Tax Basics by Burnie Maybank, South Carolina Economic Development 101,...Nexsen Pruet
Burnie Maybank hosted the Nexsen Pruet Newbie Seminar on December 1, 2011. The Newbie Seminar is designed for those new to the economic development field in South Carolina or those who would like some brushing up. Covered topics included basic property, sales and income taxes, as well as Bonds, the utility tax credit and FOIA.
Glen Birnbaum, CPA presents to local Peoria IMEC group on the business valuation process. The target audience was to manufacturing clients. Heinold Banwart, Ltd.
Tax Consequences of Asset vs. Stock SalesGlen Birnbaum
Glen Birnbaum presentation to Illinois State Bar Association in Chicago. Business Sales and Acquisitions: The Basics of Asset and Stock Transactions on April 22, 2015.
Peoria CPA firm Heinold Banwart
Twitter : présentation usages professionnels en françaisAXIZ eBusiness
Le contenu de twitter en français s'ettoffe. C'est le moment pour apprendre et se former à Twitter professionnel. Les entreprises françaises, les chambres de commerce, les collectivité locales sont de plus en plus nombreuses sur Twitter côté France. Bientôt il y aura autant de contenu de twitter en français qu'en anglais. Ce diaposif créé à l'occasion du Forum du Développement Commercial Paris novembre 2009, explique à l'aide des illustrations l'usage de Twitter
comme outil de communication externe.
Formation techniques et bonnes pratiques d'optimisation d'un site internet AXIZ eBusiness
Savez-vous que la visibilité naturelle dans les moteurs de recherche se définit en amont de tout projet de site web dans le cahier des charges ? La formation aux techniques de référencement est conçue dans l'objectif de vous aider à formuler vos exigences en matière de visibilité sur Internet afin de les communiquer dans un langage explicite à la personne chargée du développement du site.
During this webinar we will review the current status of the tax world for both business and personal tax. This webinar will dive into how we got to where we are at, what is going on now, and where we might be headed in 2017 and beyond. This presentation will also highlight new, proposed tax reform plans, how they differ from the current plans, and how they might impact both business and personal income tax.
Ronald Rakow, Boston’s Commissioner of Assessing, argues that a heavy dependence on property tax revenues makes it essential for the city to be creative in both growing and preserving its property tax base.
NCET Biz Cafe | Mike Bosma, Is My Entity Still the Right Vehicle? | Jan 2019Archersan
C Corp, S Corp, LLCs and beyond: The alphabet soup that comprises business designations can leave you with questions — lots of questions.
And that’s in a “routine” climate.
But the current business climate is anything but predictable, as tax reform has left even MORE unanswered questions. This Biz Café is here to help you rest assured that your business entity has the right designation for maximum cash flow.
Get a jump start on tax season with this presentation that will help you secure answers to your tax and deduction questions. Mike Bosma is our guest, who has been the Reno office Principal in Charge since joining CliftonLarsonAllen in January 2017. He has been in public accounting specializing in taxation for more than 24 years and is dedicated to assisting taxpayers attain higher levels of success through proactive tax planning, creative restructuring and strategic business solutions.
And he’s joining us for the January Biz Café, called “Is My Entity that I Selected Pre-Tax-Reform Still the Right Vehicle?”
Here are some questions that may just be keeping you as a business owner up at night:
• With the new 21 percent corporate tax rate, should I be a C corporation?
• How do I maximize the 20 percent 199A deduction as an S corporation?
• Should everyone be an LLC so we don’t have to pay wages?
• I am a professional services firm; how do I structure my affairs to minimize taxes?
Payroll Protection Program for Family BusinessBrent Nelson
Many family businesses could qualify for the Payroll Protection Program (PPP), which is a $349 billion program available until June 30, 2020. The PPP is a loan program, guaranteed by the Federal government, to help businesses effected by COVID-19. PPP loans can be forgiven, income tax free, up to 100% of the loan. Businesses need to act fast to utilize the program while it lasts.
NC Tax & Tag Together Program - Presentation to Local Government Finance Offi...PublicFinanceTV
Presentation of the NC Department of Transportation's "Tax & Tag Together" presentation, from March 19, 2013, webinar to local government finance officers.
The webinar was hosted by McKonly & Asbury Senior Tax Manager, Mike Eby and Senior Audit Manager, Dan Kern, along with special guest, Bonnie Mark, Principal at Delta Development Group, Inc.
The presentation gave an overview of the Federal and Pennsylvania historic preservation tax credit programs for income-producing properties. Specific discussions included: 1) requirements that need to be met for a project to be eligible for the programs, 2) the application process, 3) accounting and cost certifications, 4) tax benefits of participating in the programs, 5) and recent changes to the Federal program due to Tax Reform.
Throughout the presentation, the hosts reviewed case study examples of local and national projects that they have participated in over the years. Developers, contractors, investors, and even businesses outside the real estate industry will find that there may be opportunities for them to participate in the incentives of these programs.
Tax Cuts and Jobs Act: A Closer Look For Business OwnersRea & Associates
During this session, attendees will gain deeper insight and guidance into the business-oriented provisions of the Tax Cuts and Jobs Act. Led by Brian Kempf, CPA, and Christopher Axene, CPA, attendees will learn more about the numerous provisions guaranteed to impact business owners moving forward. The duo will also facilitate question and answer session to address concerns specific to your industry and business.
To listen to the webinar, visit: https://www.gotostage.com/channel/9304d57ec3364029b126b39d3950ebb6/recording/d0452ad1eb614d2086f65bd036368a83/watch?source=CHANNEL
For additional tax reform information, including podcasts, articles, webinars and more, visit: http://www.reacpa.com/insight/tax-reform-guidance/
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
2. www.hbcpas.com
2
Agenda
• Depreciation
• Deferred Grain Contracts
• Prepaid Farm Expenses
• Taxation of Easements
• CRP and Self Employment Tax
• Federal Tax Estimates for Farmers
• Farm Income Averaging
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Depreciation Update
• 50% Bonus Depreciation expired at
12/31/13 (new equipment)
• Sec. 179 limitation is currently at
$25,000 (new and used equipment)
– Reduced when property placed in service
exceeds $200,000
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Depreciation Update
• U.S. House has passed a bill in June to
make permanent the $500,000 section 179
limit
• Senate not likely to vote until after
November election
• President has promised to veto the bill
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How Do We Plan for This Uncertainty?
• Bill could be passed on January 1, 2015
and retroactively apply to 2014 year
• How do we make sure that income is
“low enough” if only $25,000 section 179,
but still allow for flexibility if section 179
limit is raised?
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Tax Tip #1
• When selling grain in the current year for
next year payment, be sure to use
multiple contracts to allow income to be
“pulled” into the 2014 tax year if needed
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Deferred Payment Grain Contracts
Background
• Sell grain in the fall (title has transferred)
• Wait to take check on January 1st
• Not income until the following year
• Installment sale contract
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Deferred Payment Grain Contracts
Strategy
• Can elect out of installment sale
• Thus, contract by contract, a farmer may make
an election out of the deferred treatment
• Example: You have a $250,000 grain contract.
If section 179 is passed, then you offset the
increased depreciation expense with this grain
income.
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Tax Tip #2 Amortizing Fertilizer
Expense
• If a higher Sect. 179 limit is passed:
– It may be beneficial to amortize the cost of
fertilizer paid for during the year, instead of
deducting it all in the current year
– Amount used each year would be deductible;
usually over 12 months, but may want to consult
an agronomist
– Works similar to deferred payment grain
contract
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Prepaid Farm Expenses
• Definition: Items that are paid for in the year before
the year in which they are consumed or used
• Specifically includes:
– Feed, seed, fertilizer and other similar farm supplies
– Does NOT include rent or interest expense
– Spring-applied fertilizer and chemicals and seed paid
for in the prior year (paid for, but not yet applied)
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Prepaid Farm Expenses Cont.
• Generally deductible in the year of payment for
cash basis taxpayers (including partnerships
and S corps) if three tests are met:
– Test 1: Payment must be for actual purchase (i.e.
enforceable sale contract)
• Specific quantities of specific item(s)
• No right to refund
• Should not substitute for different items
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Prepaid Farm Expenses Cont.
– Test 2: Needs to be for a business
purpose and not merely for tax avoidance
• Discount/fixing maximum price
• Securing adequate supply
– Test 3: Deduction will not result in a
material distortion of income
• Quantity purchased should be comparable to
quantity used in the next year
• Customary business practice
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Prepaid Farm Expenses Cont.
• Limited to 50% of deductible non-prepaid
farm expenses unless:
– Due to change in business operation
– Due to extraordinary circumstances
– Prepaid farm expenses for last three years total
less than 50% of deductible non-prepaid farm
expenses for last three years
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Prepaid Farm Expenses Cont.
• Example:
– Total farm expenses, including
depreciation on Sch F, of $1 million
– $600,000 represents deductible non-
prepaid items, such as depreciation,
chemicals, fertilizer, interest, etc.
– $400,000 represents prepaid chemicals,
fertilizer and seed to be applied next year
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Prepaid Farm Expenses Cont.
• Is any of the $400,000 limited?
– Non-prepaid expenses are $600,000
– 50% of $600,000 is $300,000
– Therefore, prepaid expenses of $400,000 are limited
to only $300,000
– $100,000 carried over to next year
– Limit is NOT 50% of $1 million
– Note: May be able to avoid limit if under
50% limit for prior three years
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Prepaid Farm Expenses Cont.
• Example of prior three years test:
Prepaid Non-prepaid
Prior Year 1 $275,000 $625,000
Prior Year 2 $300,000 $650,000
Prior Year 3 $325,000 $675,000
Total $900,000 $1,950,000
(46% of non-prepaid)
Since prepaid expenses total less than 50% of non-
prepaid expenses for the prior three years, the current
year 50% limit does not apply.
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Taxation of Easements
• Payments for easements can produce:
– Reductions to basis in land
– Long-term or short-term capital gains
– Ordinary income
• Usually have all of the above on the
same transaction
• Can be eligible for like-kind exchange
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Taxation of Easements Cont.
• Perpetual easement with significant
rights retained, such as the ability to
farm the ground:
– Basis in land affected by the easement is
first reduced to $0 by proceeds
– Any additional proceeds are treated as
gain reported on Form 4797 (usually L/T
capital gain)
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Taxation of Easements Cont.
• Perpetual easement with no rights
retained is treated as a sale of the
underlying affected land
– Essentially the same treatment as when
rights are retained
– It is possible for a loss to be recognized if
basis in affected land is greater than
proceeds
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Taxation of Easements Cont.
• Easements that are of specific duration
(or not perpetual) run the risk of being
treated as ordinary (lease) income by IRS
• Temporary easements are rental income
• Crop damage payments are generally
ordinary income
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Taxation of Easements Cont.
• It is possible to reduce the entire basis
of property by damage proceeds if the
entire property is affected by the
easement (severance damages)
– Example: power lines across the middle of
property that was designed for
development
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CRP SE Tax Update
• Before 2003, IRS stated that if taxpayer materially
participated in a farming operation, CRP payments were
subject to self employment tax
• In 2003, IRS took the position that merely signing the CRP
contract resulted in the taxpayer being engaged in the trade
or business of farming
• In 2008, Congress precluded CRP payments from SE tax for
taxpayers receiving Social Security retirement or disability
benefits
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CRP SE Tax Update Cont.
• In 2013, U.S. Tax Court case decided in favor of
IRS in assessing SE tax on CRP payments on land
inherited by an out-of-state landlord
– If taxpayer cash rented the land, no SE tax
would apply
– Ignored prior court cases that stated the
existence of a trade or business is determined
by facts and circumstances
– Note that active farmers will generally
automatically be subject to SE tax
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CRP SE Tax Update Cont.
• Eight Circuit Court of Appeals heard oral
arguments in June 2014, so stay tuned
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Cash Basis Accounting
• Can you pay expenses this fall and – if
later income is found to be too low – just
postpone the deduction until 2015?
• Not really…
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Cash Basis Accounting
• Generally for all other deductions, the
deduction must be taken when payment
occurs
• Arbitrarily postponing expenses is not
allowed
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Cash Basis Accounting
• Cash Basis Exception #1:
− You can begin depreciating equipment
when you legally own the asset and it is
available for use, regardless of when
payment occurs
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Fed Tax Estimates for Farmers
• March 1st deadline for filing and paying
tax
− Can be difficult to have all K-1s ready and file the
return by March 1st
− Solution?
− Pay a January 15th tax estimate
− Pay tax on April 15th and incur interest charge
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Fed Tax Estimates for Farmers
• Be aware you are only charged interest from
January 15th to April 15th, if you elect to pay late
• Federal interest rates are generally very low,
although they are nondeductible
• Interest figured on the smaller of:
− 100% of prior year tax or
− 67% of current year tax
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Fed Tax Estimates for Farmers
• Current Year Tax x 67% x 90/365 x 3%
• $100 in tax owed = $.50 penalty (one-half of one
percent)
• About a 2% annual interest rate (keep in mind,
nondeductible though)
• $100,000 in tax owed = $500 interest charge
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Farm Income Averaging
• All net farm income is eligible for farm
income averaging, even if the taxpayer
does not qualify as a farmer for the
March 1st filing date
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Farm Income Averaging
• Income that qualifies for farm income
averaging besides Sch F net income:
– Gain on sale of equipment or breeding stock (Form
4797)
– Wages to a shareholder from an S corporation
engaged in farming
– Pass through income from farming from partnerships
and S corporations
– Crop share income, provided there is a written
agreement entered into before tenant begins
significant activities
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Farm Income Averaging
• Income that does NOT qualify for farm
income averaging:
– Farm income passed through from a trust
– Gain from the sale of land
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35
Farm Income Averaging
• Allows a farmer to take current year
income, which is being taxed at higher
rates, and instead tax that income at the
rates in effect for the prior three years
• With rates being increased starting in
2013, make sure this is being computed
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Farm Income Averaging
• Farm income averaging:
– $150,000 of farm income in 2014
– Take $150,000 / 3 = $50,000
– The $50,000 is then taxed at the marginal rate in
effect for
– 2013
– 2012
– 2011
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Farm Income Averaging
• The income on which self-employment
tax is computed is based upon the
current years income and does NOT get
averaged
– In the prior example, SE tax would be based
upon the $150,000 ($150,000 x 92.35% x
15.3% = $21,194)