Neiffer: We Can Increase Profits By Having A Tax Plan
Increasing profits is the goal of every farmer out there, but typically to increase profits, you’ll need to increase yields, or make cuts somewhere in the operation. Or, you can structure your Farm Organization To Increase Profit. That was the topic of a recent lecture given by CliftonLarsonAllen’s Paul Neiffer. He noted many farmers don’t appreciate that they can look at structuring their business to save on taxes, all while remaining flexible.
Neiffer said while many farmers do what they love, it’s important that the heart doesn’t call the shots.
“It's interesting for a lot of farmers it's both a business and it's a lifestyle and because of that lifestyle they sometimes make decisions that has a detriment to the business so they have to be careful to understand business first lifestyle second.”
As we prepare to close the books on 2022, what changes to tax code or tax law do farmers need to be mindful of?
“The only thing out there right now that that's maybe major but not that major is bonus depreciation. Right now, farmers can deduct 100% of all their farm assets, except for land, that they purchase even a building. Starting next year, it's 80% and then the following year it's 60%, then 40%, and 20% and so on. That's the only major thing out there on the horizon. Meals that they buy, not for harvest meals, but if they're taking their CPA out for a lunch and they're paying for the meal that's 100% deductible this year. Next year it's 50%. So other than that there's really nothing major.”
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