Farm Tax Exemption- Expert Advice!
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- čas přidán 27. 06. 2024
- It's tax time! If you run a farm business, you know that it pays to save money wherever you can. Why not just keep your money through deductible farm expenses?
Many people who sell an agricultural or horticultural commodity, like poultry farmers, are eligible for tax breaks based off of their business expenses. This week, we sit down with our friend and tax professional Chad Brown, who gives us all of his best tips on how folks with a farm business can maximize their tax benefit.
Learn more on our blog here: www.southlandorganics.com/blo...
Getting your taxes paid for your farming operation can be daunting. I mean, who really likes to pay taxes anyway? Some famers try to rush through their taxes and get them out of the way, potentially reducing the amount of tax exemptions they could receive for their business operations.
Even though rushing through the tax process might seem easier, it truly pays back to be meticulous about maximizing your tax benefits.
Chad has good news! it's actually a great time to be a farmer from a tax standpoint in the current year.
Recent legislative decisions have not passed any bills that harm farmers from a tax perspective. No opportunities for deductions have changed, and folks with farms get the same benefits of depreciation (up to one million dollars) in equipment.
One of the most important deductions to look into is called QBI. This is a deduction for businesses where you can deduct 20% of your profit from your taxable income. Then, you just pay taxes on the 80% that's left over. Most farms qualify for QBI, so make sure to take advantage of this option!
If you make a business use of your home, you may qualify for a home office deduction. The only catch is that you have to have no other location where office-related tasks can be done. This is likely true for a lot of farms- think about where you conduct your office-related business. If it's in your home, be sure to look into the home office deduction!
Some farms look like they're losing money on paper. If this is the case for your farm, you can use your losses to offset your spouse's W2. Your losses can be accounted for and then subtracted from the amount of income tax your spouse pays. This same rule can apply if you own another business outside of your farm. This can add up to a refund of several grand that you get to keep in your family!
Due to new dependency laws, if you have kids under 17 there's much more to take advantage of. Child tax credit had almost doubled. So if you have kids who aren't adults yet, look into this too.
If you raise livestock, you qualify for so many tax loopholes and qualifying items for deductions. There are tons of deductions for folks with a farm, so hiring a tax pro is absolutely the best way to keep track and take advantage of all of these.
To truly maximize your tax deductions, you need to keep really close track of all your expenses. Even just small, $10 purchases can add up to thousands. If you're not keeping up with this, you could miss out on plenty of money. The easiest way to keep track of all of this is to get a professional to help you keep track of all the deductions.
Certain expenses you may not even think of as deductible could slip by if you're not paying close attention! Boots, equipment, machines... you need every deduction to keep as much money as possible from your farm. Your farm income is your lifeblood. You deserve to keep it!
Depending on where you live, you can qualify for a sales tax exemption on agricultural equipment and production inputs. Check to see if this is available in your state so you can get an exemption number and certificate to show you are eligible for sales tax exemption.
If you live in Georgia, you can use the Georgia Agriculture Tax Exemption (GATE) program to receive this benefit.
A few more things to look into include if you qualify for self employment tax reductions, whether or not you're a cash basis taxpayer and if you have any prepaid expenses to consider. The best way to holistically consider all of these elements is to hire a tax pro who is familiar with small business taxes.
We've said it before and we'll say it again- we always recommend you seek advice from a tax professional.
They can offer taxpayer services that save you way more money than you'll get back from your taxes. This advice is essential, potentially reducing the amount of money from your farm income that you have to hand over.
For those who produce agricultural products, it's essential to hire someone who knows what they're doing and has farm or business experience. Even a small farm can save thousands each year
No tax professional costs more than the amount you'll save by utilizing their expertise. You'll save way more than you're charged! We say pay a little to make a lot.
It's better off you spend your energy growing birds- make that money and then hire someone to help you save it.
Hiring a professional accountant has paid for itself, plus that’s one more thing I don’t have to think about.
Great information! Especially for people who are interested in becoming a farmer, it's hard work and dedication for measly profit especially when your competing with the big business monopolies that's dictate price for product. Write offs are available for pretty much every type of business anywhere in this country but yet people frown upon the producers of food for this nation like they don't have to eat anything. Great info and great advice , Thanks.
Thanks so much for this comment! We are consistently appreciative of those who put food on our tables. Happy to help share some information.
Thank you a lot for this video. This is very interesting and informative. Keep posting like those amazing videos, this is awesome.
Good planning info but being an “independent” farmer, I would rather keep up with the tax codes that apply to my situation, file my own taxes, and take the maximum deductions allowable than to hire it out because I still have to do most of the work (maintaining records and receipts, etc…). The government is NOT obligated to or entitled to collect the amount of taxes they do from any productive member of society, yet they continue the counterproductive process. We all see how irresponsible elected officials are about spending our tax dollars and printing worthless money that leads to inflation so better to take your maximum deductions and hope for the best instead of paying out or asking for permission.
You have to do what is best for you. Sounds like you have a plan! Thank you for the input.
The politicians are running away with our money because the people are ignoring their govt. period full stop. It’s our own fault but most are ignorant of who is the boss in America, We the People.
Would love a video with examples on how to create a 3 year plan for to agriculture tax exempt card.
Send me an email with a little more clarification. allen@southlandorganic.com
I don’t have to pay income tax because I just declare I’m “tax exempt ir to non taxpayer status” so what I want to know is how to have the cheapest property tax and what’s an easy farming claim to operate to get the farm assessment of my 88 acres in Oklahoma. Bees? What?
There are so many things to consider. The best would be to talk to a good tax person who is familiar with the ins and outs of farm business.
Can you talk about how to buy a truck for the farm. Taxes etc
[GRACELAND FARM INC EST 1900s] [NORTHUMBERLAND COUNTY VIRGINIA]
Can you please share a link to Chad’s business website?
Absolutely! thetaxshelter.com/
Yeah but how about other states
Chad speaks here mostly about federal taxing. You definitely need to speak to a tax consultant you trust for your local state codes.
Farm Tax Exemption - In layman term is farmers welfare. I continually see farmers complain of the regulations placed on farmers regarding their product safety. Yet the are very eager to hold their hands out for the welfare tax breaks. The non farming middle and poor class has had there tax deductions ripped from them so they can cover the greed of those businesses that has better lobbyists. The country complains of those who receive welfare that they say should be working. After 36yrs on a utility line crew at the age of 60 my body said no more. Now on a fixed income. It sickens me to see that what I once could claim on my taxes has been pulled by the same government that is giving the farmers welfare money. Your products feed America and other countries, yet Americans pay double or triple for the same product. First at the market, then by the excess taxes on us to cover your welfare. YOU
HAVE A WIN WIN CON GAME!!!
Hey John, I can't imagine the beating that 36 years on a line crew has had on your body. Wow! I agree with you it is frustrating the influence that big business has on our government. Noone realizes it more than poultry farmers. People think they are part of the "Companies" whose name is on the chicken package. The fact is that they are merely contractors for those companies and those lobbyists work for corporate and protect corporate's interests. Poultry farmers don't really have a voice. They have to do what they are told, told how much money they will get, accept it, or they will not get a contract. Then they are stuck with millions of dollars of debt with no way to pay for it. When you add to that the fact that they are maligned for doing what most people see as menial and inhumane. But those same people like having the grocery store open. The one good thing is that the government at least sees them as small business owners. Pretty much everything on these two Tax videos are the same things that small business owners take advantage of every year. I think that most people take for granted our farmers the same way we take for granted those who work those utility lines that keep our families safe and comfortable in our homes. Thank you for your service.
that's the whole problem big business is too big and big business buy our elected officials. That's why there should be term limits on senators and house of representatives and limits on what they can accept as contributions