Sales To Cooperatives Under The New Tax Law

By: Barry Ward, Director, Ohio State University Income Tax Schools, Leader, Production Business Management

Upon passage and signing of the Tax Cuts Jobs Act in December 2017, Cooperatives suddenly had a decided advantage in buying over “independent” buyers of ag commodities. The new tax law had somewhat inadvertently included a “grain glitch” (which would have affected more than grain sales) that had effectively allowed for a 20% deduction on gross sales which conferred a decided advantage over sales to other non-Cooperatives. Continue reading

Farm Tax Issues- What Tax Reform Means for Farmers

By: David L. Marrison, OSU Extension Extension Educator-marrison.2@osu.edu
Originally published in the Farm and Dairy

The goal of last year’s Tax Cuts and Jobs Act was to simplify taxes.  While simplifications were made, I would argue that farm taxes have become more difficult.  There have been major changes to equipment depreciation, like kind exchanges, and a brand new Qualified Business Income deduction.  Continue reading

Section 199A: The Rules For Entities

By: Paul Neiffer, The Farm CPA Blogger
Previously published by AgWeb Daily

The new tax code requires the 20% Section 199A deduction to be calculated for each separate business. Most farm operations operate in a multi-entity structure: an entity as the “farmer,” one or more entities to own the farmland that is rented to the “farmer” and perhaps even other entities to hold the equipment and rolling stock. Continue reading

Tax Dilemma: Section 199A Controversy

By Tyne Morgan, US Farm Report

The new tax code is being assessed, and many are calling it a mixed bag for agriculture.

Section 199A is an area that some producers want to see changed, and others want it left untouched.

Sen. Chuck Grassley (R-Ia.) says legislators reached a fix last week, but sources close to the matter say that’s simply not true.

Watch the Farm Journal Report on U.S. Farm Report above.

Work Ongoing to Address Unintended Results of Tax Change That Favors Cooperatives

By: Matt Reese, Ohio’s Country Journal

While many have suggested the recently passed tax law has numerous benefits for agriculture, there are some potential negative implications for private grain companies and other privately held purchasers of agricultural goods.

A provision affecting the qualified cooperative dividend was added to the tax bill late in the process last year in an effort to avoid a tax increase for farmers previously relying on the Section 199 Domestic Production Activities Deduction. The problem that has since surfaced, however, is that the provision may inadvertently favor cooperatives over private grain buyers due to potential tax deductions for farmers. In short, the change cuts farmer taxes on proceeds from agricultural products sold to cooperatives. Continue reading

6 Tips for Tax Time: Make the Most of the Year’s End

By AgWeb Guest Editor

As the calendar year comes to a close, most dairy farmers have already made at least one trip to the accountant’s office. There’s a good chance most dairy farmers have enough expenses to offset low on-farm income this year, but it still pays to pay attention to year-end tax basics. Here are a few tax tips from Paul Neiffer, CPA and principal at CliftonLarsenAllen.

  1. Keep Accurate Records

This should go without saying, but your accountant can only work with the information you provide. If your records are incomplete, you could end up paying more taxes than necessary. Continue reading