From capital purchases to higher farm income you probably have a lot on your mind.
If all went well, you've got the combine parked and you're already well on your way to planning 2014, which can include lining up key educational meetings to attend or perusing your data with your trusted agronomist. One key area ahead is sitting down with your tax planner to minimize that bill - no reason to pay more in that you need to, even as all levels of government scramble for income sources.
Last week, I mentioned the Section 179 depreciation, which requires that you take delivery of the purchased item at your place of business before year end. Time is running out there. But tax planning is more than about buying new gear to cut your bill. Word came out of the Wall Street Journal recently that Congress is moving slow with renewal of popular tax provision, and while they MAY be renewed in 2014, there's no word on them now. That doesn't bode well for a surprise reinstatement of Section 179 - though with this Congress anything can happen.
With USDA reporting another solid income year for farmers, that means you've got cash on hand that's taxable. Time spent with an ag-focused accountant can help you legally reduce that burden as low as possible. Of course, having income to be taxed is a good thing, and the last few years I'm sure there a few you you dear readers who are not happy over your tax bills.
Long run is that given the potential reduced income ahead, planning now could help. Deferring income into 2014 may make sense (again, that's for your accountant to say). Maximizing Section 179 might make sense, if you have the debt capacity.
The last five years have been an opportunity for crop farmers and a challenge for livestock producers, but each of you has stuck with it and many have done it by thinking creatively. As you look ahead to 2014, managing the tax bill is important too.
Of course, as one farmer told me once - begrudgingly - "no one ever went broke paying taxes." Having income to be taxed (no matter what you think of the tax) isn't all bad. Happy planning!