The Iowa State University Center for Agricultural Law and Taxation is an invaluable resource of farm-related information for many individuals across the Midwest. Recently, the center released a year-end article related to ag-specific year-end tax planning and considerations. Our ag-industry experts have broken down a couple key takeaways from the post which are summarized below.
- Be aware of “extra” farm income which includes the Coronavirus Food Assistance Programs 1 & 2, Syngenta settlements, individual economic stimulus payments, Paycheck Protection Program, federal/state grants, and more. All of these are in addition to the standard USDA revenues.
- Derecho considerations: There are tax implications to not only crop insurance, but also property and casualty insurance. Some of these receipts may be eligible for deferral to 2021 income.
- Don’t delay your year-end tax planning:
- Farmers have unique tax laws available to them to level income from year to year.
- Given the number of extraordinary revenue sources, many farmers are finding themselves sitting on more income than they likely anticipated.
- It’s important for farmers to take steps now to identify their options and mitigate their tax liability before year-end.
If you have any questions about your tax planning and how the many changes of 2020 might impact your year-end procedures, BerganKDV can help. Contact one of our ag experts here. If you want to learn more about how your operations stack up compared to your competitors, we encourage you to fill out this benchmark survey. That way you can transition into the new year with the industry trends and landscape you need to plan for the future.
(The full ISU CALT article can be found at: https://www.calt.iastate.edu/blogpost/end-year-considerations-unprecedented-year)