Like everyone, farmers would like to increase their income while avoiding paying higher tax rates in the future. In an article from AGWeb, author Paul Neiffer discusses how farmers can increase their income quickly.
Neiffer writes, “Most of these situations involve trying to soak up a standard deduction and personal exemptions that might go to waste. Also, most farmers want to at least pay taxes in the 15% bracket to avoid paying higher rates in the future, even though farm income averaging can help mitigate this situation. Other farmers want to show taxable income for banking purposes”.
In this article Neiffer discusses:
- Using deferred payment contracts
- Elect to capitalize your fertilizer costs
- Elect to capitalize repair cost
- Do not elect the de minimis safe harbor
- Elect out of bonus depreciation
Neiffer continues, “It takes time and effort to investigate the avenues to add income to your tax statement. But doing so can be beneficial”. Ask your accountant how can you use these techniques to help you raise your income?
To read more, see the full article from Paul Neiffer in AGWeb.