TheFirstFurrow

Monday, April 2, 2018 A Closer Look at Taxes: 5 Questions with AFBF’s Pat Wolff

April is here, and with it comes warmer weather, spring break vacations, . . . and taxes. Yes, we hate to bring it up but Tax Day is just around the corner — April 17th to be exact — so we thought we’d look a little closer at some of the finer points of the tax reform law that Congress passed a few months ago. We’ve fired a handful of questions to Pat Wolff, Senior Director of Congressional Relations for American Farm Bureau Federation, and she’s given us the inside scoop on what’s new with taxes and what’s on the horizon.

Question #1: The Tax Cuts and Jobs Act is a comprehensive law, making changes to the nation’s tax policies that impact practically every individual and business in the US. Which provisions do you think are most important for North Carolina farmers and how does this reform package help them going forward?

The cornerstone of tax reform is lower tax rates for individuals and businesses. For farmers that means being about to keep more of their money to reinvest in their operations. Farms that pass profits through to their owners for taxation (sole-proprietorships, partnerships and under Subchapter S) will be taxed from zero to 37 percent with that top rate kicking in at $600,000 of income. That’s compared to the old law where the top rate of 39 percent used to start when income exceeded $470,000. The top corporate tax rate permanently shrinks from 35 percent to 21 percent.

Expanded deductions will allow farmers to write off more of their expenses immediately. This will make it easier to reduce taxable income by matching income with offsetting expenses. Section 179 small business expensing is permanently doubled to $1 million. There are no limits on bonus depreciation. And almost all farm businesses get to keep using cash accounting and deduct their interest expenses and property taxes.

Question #2: The reduction in the corporate tax rate has gotten a lot of attention, but the majority of North Carolina farms are family-owned sole proprietorships and partnerships. Are there any provisions in the new tax law that will help family-owned sole proprietorships and partnerships?

Tax reform provides a new business deduction that is available only to sole-proprietorships, partnerships and those that pay taxes under Subchapter S. Individuals operating pass-through businesses will be able to take a tax deduction equal to 20 percent of net farm income with limitations if taxable income exceeds $315,000 for a couple.

Question #3: Considering that most farms have little liquidity and their capital is usually tied up in the land and farm equipment, why was it important that Congress expand the estate tax exemption level?
Wednesday, August 16, 2017 It’s Time to Focus on Tax Reform

With Congress back in their districts for August Recess, we thought it’d be a good time to talk about a some federal issues that are a high priority for Farm Bureau. First up this week: tax reform.

Congress is starting to get serious about tax reform. Both the President and leaders in Congress say they want to develop a tax reform plan this fall. But what will it look like? Will it include the things farmers need to be successful?

Agriculture operates in a world of uncertainty. From unpredictable commodity and product markets to fluctuating input prices, from uncertain weather to insect or disease outbreaks, running a farm business is challenging under the best of circumstances. Farmers need a tax code that recognizes their unique financial challenges.

Farm Bureau supports replacing the current federal income tax with a fair and equitable tax system that encourages success, savings, investment and entrepreneurship. We believe that the new code should be simple, transparent, revenue-neutral and fair to farmers.

Wednesday, April 13, 2016 Tax Day on the Farm

Tax Day is right around the corner, and people from all across the country and from all walks of life are working through the complex and confusing process of filing their taxes. Like everyone else, farmers (and their tax professionals) have to work through a maze of rules and regulations to complete their returns. As Tax Day approaches, let’s take a moment to make some observations about farmers and taxes.