Tax Tips for Students and Parents Paying for College Expenses

Source-Internal Revenue Service

Fall weather has arrived in Ohio meaning that thousands of young adults have returned to colleges across the state. As college costs continue to increase, the Internal Revenue Service is offering tips for students and parents as they pay tuition and other school related fees. The Internal Revenue Service reminds students or parents paying such expenses to keep receipts and to be aware of some tax benefits that can help offset college costs.

Typically, these benefits apply to you, your spouse or a dependent for whom you claim an exemption on your tax return.

1. American Opportunity Credit This credit, originally created under the American Recovery and Reinvestment Act, has been extended for an additional two years – 2011 and 2012. The credit can be up to $2,500 per eligible student and is available for the first four years of post secondary education. Forty percent of this credit is refundable, which means that you may be able to receive up to $1,000, even if you owe no taxes. Qualified expenses include tuition and fees, course related books, supplies and equipment. The full credit is generally available to eligible taxpayers whose modified adjusted gross income is below $80,000 ($160,000 for married couples filing a joint return).

2. Lifetime Learning Credit In 2011, you may be able to claim a Lifetime Learning Credit of up to $2,000 for qualified education expenses paid for a student enrolled in eligible educational institutions. There is no limit on the number of years you can claim the Lifetime Learning Credit for an eligible student, but to claim the credit, your modified adjusted gross income must be below $60,000 ($120,000 if married filing jointly).

3. Tuition and Fees Deduction This deduction can reduce the amount of your income subject to tax by up to $4,000 for 2011 even if you do not itemize your deductions. Generally, you can claim the tuition and fees deduction for qualified higher education expenses for an eligible student if your modified adjusted gross income is below $80,000 ($160,000 if married filing jointly).

4. Student loan interest deduction Generally, personal interest you pay, other than certain mortgage interest, is not deductible. However, if your modified adjusted gross income is less than $75,000 ($150,000 if filing a joint return), you may be able to deduct interest paid on a student loan used for higher education during the year. It can reduce the amount of your income subject to tax by up to $2,500, even if you don’t itemize deductions.

For each student, you can choose to claim only one of the credits in a single tax year. However, if you pay college expenses for two or more students in the same year, you can choose to take credits on a per-student, per-year basis. You can claim the American Opportunity Credit for your sophomore daughter and the Lifetime Learning Credit for your senior son.

You cannot claim the tuition and fees deduction for the same student in the same year that you claim the American Opportunity Credit or the Lifetime Learning Credit. You must choose to either take the credit or the deduction and should consider which is more beneficial for you.

For more information, visit the Tax Benefits for Education Information Center at www.irs.gov or check out Publication 970, Tax Benefits for Education, which can be downloaded at www.irs.gov or ordered by calling 800-TAX-FORM (800-829-3676).

Farm Management, Marketing and Economics Events at the 2011 Farm Science Review

by Barry Ward, Stan Ernst and Peggy Hall, Department of Agricultural, Environmental, and Development Economics, Ohio State University

Even though new equipment and machinery dominate the Farm Science Review each year, economics and the bottom line always play the major role in your decision making. The Department of Agricultural, Environmental and Development Economics together with Ohio State University Extension will offer several activities, exhibits, presentations and opportunities to interact with Agricultural Economists, Farm Management Specialists and Extension Educators at this year’s Farm Science Review, September 20th through the 22nd at the Molly Caren Agricultural Center near London, Ohio.

The Farm Business Office
The Farm Business Office at the Farm Science Review is located in the Francine Firebaugh Building and will give Review goers the opportunity to interact one-on-one with Ohio State University Extension Farm Management Specialists, OSU Agricultural Economists, and OSU Extension Educators.

Review goers can seek advice on various farm business and management topics including budgeting, cash rents, flexible cash rent arrangements, land purchase issues, input buying, farm transition planning, estate planning, retirement planning, farm record keeping and analysis, tax management, human resources management, risk management issues and more.

OSU Extension Enterprise Budgets will be available along with “Ohio Farm Custom Rates” and “Western Ohio Cropland Values and Cash Rental Rates 2010-11”. A new decision making tool – Flexible Cash Lease Agreement Calculator will be on display and available for Review goers.

Ag Law Office
This year there will be a new “office” in the Firebaugh Building located in OSU Central on Friday Avenue. OSU Extension will sponsor the new “Ag Law Office” to provide law education in areas important to agriculture.

Come in and talk with our agricultural attorney, Peggy Hall, about legal issues on your farm. Hall will have legal resources available on topics such as oil and gas leasing, farmland leases, livestock care standards, agricultural zoning and premises liability, and will show you how to locate legal information on her website.
Hall will also provide review goers with opportunities to meet attorneys from around Ohio who practice in agricultural law. Stop by, meet agricultural attorneys, and hear what they think about the latest legal issues affecting agriculture.

Natural Gas Production: The Impact of Marcellus and Utica Shale on Rural Economies

Our annual Farm Science Review panel will have you thinking about the impact of Marcellus and Utica Shale gas exploration on Ohio’s economy, communities, and infrastructure. Expect some analysis, some predictions, and probably an argument or two. And take an opportunity to stump the panel with your perspective. The OSU experts includes Doug Southgate, Allen Klaiber, Mike Lloyd and moderator Matt Roberts. Come join their lively debate.

10-11 a.m. Tuesday, September 20, 2010
Tobin Building, Molly Caren Center
Sponsored by OSU Agricultural, Environmental & Development Economics

“Question the Authorities”
Each day of the Review, you’ll have an opportunity to participate in live conversations on timely topics – everything from current market behavior, marketing and economic performance, to energy economics, and new policy questions for rural America. Stan Ernst from OSU’s Department of Agricultural, Environmental, and Development Economics leads the discussion, then opens things up to the audience – your chance to question our authorities. On the stage in Alumni Park on Friday Avenue. (Topics and times are subject to change. Check the signboard along Friday Ave. for daily lineups.)

Tuesday, September 20 – Stan Ernst (OSU AED Economics)
9:00 Grain Market Outlook – Matt Roberts (OSU AED Economics)
11:15 Crop Input Costs – Barry Ward (OSU AED Economics)
11:30 Income & Employment – Luther Tweeten (OSU AED Economics)
11:45 Federal Budget Adventures – Carl Zulauf (OSU AED Economics)
12:05 Grain Market Outlook – Matt Roberts (OSU AED Economics)
12:25 Shale Gas: A New Crop for Ohio? – Doug Southgate (OSU AED Economics)
12:45 Legal Issues in Leasing Land for Oil & Gas Production – Peggy Kirk Hall (OSU AED Economics)
1:00 Grain Market Outlook – Matt Roberts (OSU AED Economics)
1:20 World Food Economy – Doug Southgate (OSU AED Economics)
1:40 Ag Policy Update – Carl Zulauf (OSU AED Economics)
2:00 Corn, Beans & Eggplant? Adding produce to your farm – Brad Bergefurd (OSU South Centers)
2:20 Working Your Farm Budget – Barry Ward (OSU AED Economics)
2:40 Estate Planning & Farm Transfer – Chris Bruynis, (OSU Extension)
3:00 The Costs of Farm Safety – OSU Ag Safety Program

Wednesday, September 21 – Stan Ernst (OSU AED Economics)
9:00 Federal Budget Adventures – Carl Zulauf (OSU AED Economics)
9:20 Grain Markets Outlook – Matt Roberts (OSU AED Economics)
9:45 Estate Planning & Farm Transfer – Chris Bruynis, (OSU Extension)
10:00 On-farm Energy Audits – Chad Martin (Purdue)
10:20 Farmland Values & Cash Rents – Allan Lines/Barry Ward (OSU AED Economics)
10:40 Ag Policy Update – Carl Zulauf (OSU AED Economics)
11:00 Farm Finance for Women – Julia Woodruff (OSU Extension Erie Co)
11:15 Grain Market Outlook – Matt Roberts (OSU AED Economics) & Corinne Alexander (Purdue Ag Economics)
11:45 Marketing Small Fruit – Gary Gao (OSU Extension/South Centers)
12:00 Wind Farming – Chad Martin (Purdue)
12:20 Recent Developments in Alternative Fuels: Military & Civilian – Bob Allen (Wright-Patterson Air Force Base, Fuels Research Lab)
12:40 Legal Issues in Leasing Land for Oil & Gas Production – Peggy Hall (OSU AED Economics)
1:00 Food Price Outlook – Corinne Alexander (Purdue Ag Economics)
1:20 Healthy Food From Gas Stations? – Jill Clark (OSU AED Economics)
1:40 CSA’s…Subscription Farming – Beth Scheckelhoff (OSU Extension ABE Ctr)
2:00 Distribution Channels: Getting Food Crops to Consumers – Jill Clark (OSU AED Economics)
2:20 Hydroponic Market Opportunities – Beth Scheckelhoff (OSU Extension ABE Ctr)
2:40 Crop Input Outlook – Barry Ward (OSU AED Economics)
3:00 Greenhouse Tomato Opportunities – Beth Scheckelhoff (OSU Extension ABE Ctr)

Thursday, September 22 – Stan Ernst (OSU AED Economics)
9:15 Crop Input Outlook – Barry Ward (OSU AED Economics)
9:40 Livestock Law– Peggy Kirk Hall (OSU AED Economics)
10:00 Making Room for the Farmer’s Daughter – Julia Woodruff (OSU Extension Erie Co)
10:20 Estate Planning & Farm Transfer – Chris Bruynis, (OSU Extension-Wyandot Co)
10:40 Grain Market Outlook – Matt Roberts (OSU AED Economics)
11:00 Markets for Whitetail – Jonathan Ferris (Purdue Extension)
11:20 Legal Issues in Leasing Land for Oil & Gas Production – Peggy Kirk Hall (OSU AED Economics)
11:40 Farmland Values & Cash Rents – Allan Lines/Barry Ward (OSU AED Economics)
12:00 Grain Market Outlook – Matt Roberts (OSU AED Economics)
12:20 Farm Finance for Women – Julia Woodruff (OSU Extension Erie Co)
12:40 Working Your Farm Budget – Barry Ward (OSU AED Economics)
1:00 Grain Market Outlook – Matt Roberts (OSU AED Economics)

Time to Renegotiate Cash Rental Rates

By: Chris Bruynis, Assistant Professor & Extension Educator

With the late planting this spring, farmers will be harvesting somewhat later than normal this fall. The late harvest will challenge farmers to get wheat planted on time and crops harvested before winter weather arrives. Many times farm rental arrangements are discussed following harvest, but farmers and land owners may want to get this completed before harvest begins. This will allow both parties the necessary time needed to arrange a rental agreement beneficial to both parties.

One of the more common questions asked of Extension Educators is what is an appropriate cash rent? Establishing an appropriate cash rental rate for a farm is difficult and is often influenced by several factors. While it is likely that each situation will have some features that make it unique, Craig Dobbins, Department of Agricultural Economics, Purdue University states the following items in this list are common considerations for many situations. The list includes land quality, fertility, tile and drainage, use of facilities, expected crop returns, risk, services provided by tenant, previous relationship history, payment dates, tillage, previous crops, federal farm program, logistics of crop movement, size and location of farm, and size and shape of fields. For more information see http://www.agecon.purdue.edu/extension/pubs/LeasePointsConsider.pdf.

Another good source of information that can help determine an appropriate land rental rate is the research report prepared by Barry Ward, Agricultural, Environmental and Developmental Economics, Ohio State University titled Western Ohio Cropland Values and Cash Rents 2010–11. This report can be found at http://ohioline.osu.edu/ae-fact/pdf/11-AED-911.pdf.

Finally, land owners and farmers often inquire what should be included in a quality land rental agreement. Although a qualified attorney should always be consulted, there is a good checklist that was written by Don Breece, OSU Extension. This checklist allows users to think through the different components that are in most good farm leases and can be found at http://ohioline.osu.edu/fr-fact/0003.html. Additional question on farm rental agreements can be directed to your local Agricultural Extension Educator or by email to the Ohio Ag Manager Team at ohioagmanager-on@ag.osu.edu.

Yield Monitor Calibration Tips – Time is Money!!!

By:  John Barker, OSU Extension – Knox County

GPS-based yield data has proven to be an extremely valuable management tool on many Ohio farms.  However, improperly calibrated yield monitors can essentially generate difficult to interpret or useless data … Garbage In = Garbage Out

Economic risk in agriculture has increased dramatically.  Considering the amount of economic risk involved in each decision, taking the time and patience to properly calibrate a yield monitor is essential if the yield data will be used to make future agronomic decisions for your farming operation.

Most yield monitors operate on the same basic principles. Yield monitor manufacturers strive to build accuracy into their units; however, each machine has its sources of errors. Proper calibration requires harvesting 3 to 5 separate calibration loads.  Each load should represent different flow rates.  This can be easily accomplished by harvesting at different speeds (i.e. 3 mph, 3.5 mph, 4 mph, 4.5 mph, 5 mph, etc.)  The different flow rates represent different yield levels to the yield monitor.  Additionally most manufacturers recommend that the calibration load weigh between 3,000 to 6,000 pounds, approximately 50 – 100 bushels.  Each load should be individually weighed in a weigh wagon or other accurate scales.  If one load appears to be uncharacteristically high or low, redo that load before completing the calibration.

Check the accuracy of your yield monitor throughout the harvest season.  To insure consistent data additional calibrations may be necessary.  Multiple calibrations are essential in higher moisture grain.  For example corn at 25% moisture moves through a combine much differently than corn at 17% moisture.

Other important tasks:

  • Calibrate for each grain type.
  • Calibrate grain moisture sensor
  • Calibrate temperature sensor

See the following yield monitor checklist for more tips.

Yield Monitor Checklist

Before Operation

  • If you have not already done so, back up any data from the previous season on the memory cards, thumb drives, monitors, etc., After the previous harvest data is backed up delete the files from the memory devices. It is good practice to keep several back up copies of the raw data in different locations in case it is lost, stolen, damaged or modified.
  • Check your memory card, thumb drive, etc., to be sure they work properly.
  • Contact your local dealer or manufacturer to make sure that you have the recent software and firmware upgrades for your yield monitoring and mapping system. You can obtain information about these upgrades through your manufacturer’s web site or by contacting technical support. 
  • Check all cables, connections, and sensors for wear or damage from rodents. 
  • For elevator-mounted moisture sensor units make sure the grain is cleaned out and the manual clean-out motor works and all doors are shut! 
  • Inspect the flow sensor. Look for wear on the grain elevator and missing or worn paddles. Check to make sure that the spacing between the paddles and the top of the elevator meets the manufacturer’s requirements. 
  • Look for wear on the flow sensor’s impact or deflector plates and replace if plates appear worn. 
  • If you purchase a new or used combine with an existing yield monitor installed double check to make sure it is installed properly. 
  • Avoid running electrical wires next to the GPS antenna which may cause interference with the receiver signal. Running wires perpendicular to each other decreases the chance for electrical noise that may occur from other electronics. 

During Operation, Prior To Calibration 

  • Make sure your memory card, thumb drive, etc., is installed into your yield monitor and turn on your combine and yield monitor. Make sure there is proper communication between the card and the display monitor. Usually an error message will appear on the display indicating there is no communication with the card. 
  • Check to see if you are receiving a good differential correction signal (DGPS).
  • Raise and lower the header to make sure the stop height switch operates correctly. Some monitors are equipped with a manual switch which turns on and off data collection to your monitor. You may have to adjust the header height switch to accommodate the preferences of different operators during harvest. 
  • Make sure to set row width according to number of rows for a row crop header and the appropriate width of a cutting platform header. 
  • Engage the separator and observe the elevator speed on the monitor to see if it is working. 
  • Put the combine in drive and make sure the ground speed indicator is working. 
  • Before calibrating loads make sure you will be using accurate scales to weigh the grain. Certified scales or calibrated weigh wagons are recommended. If you are using weigh wagons it is recommended to leave the wagon in one location in the field. Moving the weigh wagon through a field causes it to shake and bounce which can throw off the calibration of the weigh wagon. Make sure you are also using the same scales throughout calibration. 

During Calibration

  • When collecting temperature readings of the equipment for some yield monitors make sure the combine has been out in normal operating temperatures for several hours. For example, taking a temperature reading from the combine when it has been in the shed or under a shade tree is much different than under direct sunlight. Take temperature readings close to the moisture sensor on the combine. 
  • Collect moisture calibrations for each grain type. Take a good representation of the moisture of the grain harvested throughout the loads. 
  • When calibrating monitor for ground speeds use typical field conditions rather than a road or waterway. Tire slippage can create inaccuracy with calibration. 
  • Harvest calibration loads at different flow rates. Yield will vary throughout the field. Adjusting flow rates will improve accuracy. When calibrating loads it is recommended to use loads between 3,000 to 6,000 pounds. This helps reduce variability with excess grain that may be in the combine. 
  • Gather loads in well represented areas of the field. Avoid starting calibration loads on turn rows, weed patches, or areas of major topography changes in the field. Hillsides and rolling ground can impact calibration load data because of how the grain impacts the flow sensor. If you are unable to avoid topographical changes make sure you get a good representation of loads going up-and-down hill and side-to-side of a hill. 
  • It is recommended to calibrate for each type of grain for each year. The dynamics of the combine changes from wear and tear and can influence the outcome of your yield data. 
  • When conducting on-farm research trials or harvesting fields with multiple varieties consider creating a calibration load for each treatment or variety. For example, calibrate for regular corn and high oil corn separately due to the differences in test weight and moisture characteristics of the grain. 
  • Calibrate for different moisture levels per type of grain. For example, calibrate differently for corn below 22% moisture versus corn above 22% moisture. 

During Harvest 

  • Correct any malfunctions or errors indicated by the yield monitor. This can include moisture and flow sensors not working properly and loss of DGPS signal. Make sure the monitor is actually collecting data. Sometimes one can manually switch off data collection on the monitor and forget to turn it back on. 
  • If you have a long harvest season it would be wise to do periodic calibration loads throughout the season to check or improve accuracy. It is suggested to recalibrate if you see more than a 5 percent difference in error, 5 lb/bushel differences in test weight, or temperature changes greater than 10 degrees. 
  • It is recommended to back-up data onto your computer and data storage devices frequently throughout the harvest season. A simple electrical shock form improper wiring or lightning can destroy your data. 
  • If significant changes are made to the elevator chain, paddles, or flow sensor during harvest you will need to recalibrate. Tightening the elevator chain, replacing old paddles or changing the gap of the flow sensor to the paddles changes the outcome of the previous calibration. 
  • If you run into problems with the monitoring equipment during harvest check through the trouble shooting information in the operators manual. Contact technical support if you are unable to solve the problem. 

 

Northeast Ohio New and Small Farm College to be held this fall in Northeast Ohio.

There is a growing trend in Ohio Agriculture toward the direct marketing of agricultural products featuring locally grown food products. Consumers are becoming more and more aware of the benefits of buying local and buying fresh. As the demand for local food products increases so does the interest in growing and producing a variety of agricultural products for these markets. Perhaps this is something that you have considered for your small acreage but do not know where to begin.

To help land owners decide what to grow or raise on their excess acreage, the Ohio State University Extension offices in the Western Reserve Extension Education and Research Area are pleased to announce the Northeast Ohio New & Small Farm College titled “Too Much to Mow-What Do I Grow?” will be held on Monday evenings September 26 and October 3, 10, & 17, 2011 from 6:00 to 9:00 p.m. in Madison (Lake County) Ohio. This college is open to any person in Northeast Ohio or Northwest Pennsylvania.

Click here to access the registration flyer

This four week college is designed to help farmers increase their profits from their small acreage. This college is open to all new or aspiring farmers, new rural landowners, small farmers, and farm families looking for new ideas. The small farmer college is split into 4 evening sessions designed to challenge participants to plan for success. The first session titled “Getting Started” will help participants build the foundation for their farm business. Some of the session topics will include: developing real-life expectations for your small farm, developing goals and objectives, developing an agricultural business plan, and tax and financial management secrets for small farms.

The second session titled “Enterprise Selection” will help participants decide what to raise/grow on their farm and how to develop realistic budgets for these enterprises. This session will be tailored-made based on the interests of the group. Learn more about vegetable, greenhouse, fruit, nursery and bio-fuel crops, as well as aquaculture, livestock, hay, traditional and alternative farm enterprises. Let your passions lead you to the right agricultural enterprise to raise or grow.

The third session titled, “Experience at the Farm & Market Level” will be held at Rainbow Farms outside of Perry, Ohio. During this session, participants will take a tour of the farm to learn about raising, selecting, and marketing fruit and vegetable crops. Rainbow Farms raises a wide variety of fruits and vegetables. They presently sell at 11 outdoor farmer’s markets per week, operate a pick your own operation, and recently opened an on-site indoor market.

The final session titled “Marketing & Resources for Small Farms” will help participants build a marketing direction for their business. Learn how agricultural products are being marketed across northeast Ohio. This session will introduce the local agencies which can help farmers as they start, grow or maintain their farm (tax savings, federal, state and local farm programs) business.

Participants will receive a light meal at sessions 1, 2, and 4; 12 hours of classroom and on-site instruction; resource notebook (1 per family); and connections to resources and people that will help your farm business grow. The first, second, and fourth sessions will be held at Grand River Cellars Winery & Restaurant located on State Route 538 between Thompson and Madison, Ohio. The third session will be held at Rainbow Farms located outside of Perry, Ohio.

The registration fee for this college is $60 for the first registrant from each family and $30 for each registrant thereafter. This fee includes a course notebook (1 per family), class handouts and light meal/refreshments at each session. Call the Ashtabula County OSU Extension office at 440-576-9008 to make your reservations. Reservations are requested by Monday, September 19, 2011. Call the Ashtabula County Extension office for more information. Registration forms can also be found at http://ashtabula.osu.edu.

Deputy Secretary dispels rumor of CDL requirement for farm equipment

We’ve heard a number of questions and rumors about the federal government planning to require that operators of farm equipment obtain a CDL (Commercial Driver’s License).  Brownfield has just reported on a statement issued at the Ohio State Fair today by a U.S. Department of Transportation official.  According to the news source, US DOT Deputy Secretary John Porcari clarified that the federal agency is not considering any such requirement for farm equipment operators. 

“Let me say this as bluntly as I can to the agricultural community, there is no new regulation coming down the pike requiring commercial driver’s licenses for operators of farm equipment,” said Porcari.

 Go to Brownfield Ag News for the full story.