Farm Tax Update to Be Held on December 10 in Coshocton, Ohio

OSU Extension in Coshocton County is pleased to be offering a Farm Tax Update on Monday, December 10, 2018 from 7:00 to 8:37 p.m. at the Coshocton County Services Building – Room 145 located at 724 South 7th Street in Coshocton, Ohio.

OSU Extension Educator David Marrison will share details on the “Tax Cuts & Jobs Act of 2017” and its impact on farm taxes. It is not business as usual in the world of farm taxes. Learn more about the changes to farm machinery depreciation, like-kind exchanges, and more about the new Section 199A deduction for Qualified Business Income.

This program is free & open to the public! However, courtesy reservations are requested so program materials can be prepared. Call the Coshocton County Extension at 740-622-2265 to RSVP or for more information.

 

Small Farm & New Farm College Programs to be Held

By Tony Nye, Extension Educator

Are you a small farm landowner wondering what to do with your acreage? Are you interested in exploring options for land uses but not sure where to turn or how to begin? Have you considered adding an agricultural or horticultural enterprise but you just aren’t sure of what is required, from an equipment, labor, and/or management perspective? Are you looking for someplace to get some basic farm information? If you or someone you know answered yes to any of these questions, then the Ohio State University New and Small Farm College program may be just what you are looking for.

The Ohio State University New and Small Farm College is an 8 session short course that will be held one night a week. The 2019 Ohio New and Small Farm College program will be held in three locations across the state including:

Miami Valley CTC, West Building, Room 179, 6800 Hoke Road, Englewood, OH 45315. Classes will be held on Tuesdays beginning January 8 and concluding on February 26, 2019. Inclement weather makeup date will be March 5. Contact the Montgomery County Extension Office at 937-224-9654.

Vinton County area at the Community Building, 31935 State Route 93, McArthur, OH 45651. Classes will be held on Tuesdays beginning January 15 and concluding March 5, 2019. Inclement weather makeup will be March 12. For more information, contact Vinton County Extension at 740-596-5212.

Adams County area at the North Adams High School, 96 Green Devil Drive, Seaman, OH 45679. Classes will be held on Wednesdays beginning January 16 and concluding March 6, 2019. Inclement weather makeup date will be March 13.  For more information, contact Adams County Extension at 937-544-2339.

All colleges will start each evening at 6:00 PM with a light dinner with the nightly presentations beginning at 6:30 Pm and concluding at 9:00PM.

Topics that will be covered in the Small Farm College course include: Getting Started (goal setting, resource inventory, business planning), Appropriate Land Use -Walking The Farm, Where to Get Assistance, (identifying various agencies, organizations, and groups), Natural Resource Management including soils, ponds, woodlands and wildlife, Legal Issues, Insurance, Business Structure, Finances & Record Keeping, and Marketing Alternatives, Crop and Horticultural Production Options, Animal Production Options,

The cost of the course is $150 per person, $100 for an additional family member. Each participating family will receive a small farm college notebook full of the information presented in each class session plus additional materials. Registrations are now being accepted. For more details about the course and/or a registration form, contact Tony Nye, Small Farm Program Coordinator 937-382-0901 or email at nye.1@osu.edu.

 

Agronomy and Farm Management Podcast

by: Amanda Douridas and Elizabeth Hawkins

Stay on top of what is happening in the field and the farm office as Amanda Douridas and Elizabeth Hawkins interview experts in agronomy and farm management. Hosted by Ohio State University Extension, this podcast takes a bi-monthly dive into specific issues that impact agriculture, such as: weather, land value, policies, commodity outlooks, and more.

This podcast began in May 2018 and has a great library of podcasts to choose from. This winter, we will feature some of the Ask the Expert interviews that occurred during Farm Science Review on Farm Management topics. Catch up on the ones you missed during the show.

Subscribe through iTunes at http://go.osu.edu/iTunesAFM or Stitcher at http://go.osu.edu/StitcherAFM to have the newest episodes added to your playlist. Stay up to date with us on Facebook @AFMPodcast and Twitter @AFM_Podcast.

 

2019 Outlook Meetings to be held Across Ohio

by Amanda Douridas, Extension Educator

Ohio State University Extension is pleased to announce the 2019 Agricultural Outlook Meetings! In 2019 there will be seven locations in Ohio. Each location will have a presentation on Commodity Prices- Today’s YoYo. Additional topics vary by location and include U.S. Trade Policy: Where is it Headed, Examining the 2019 Ohio Farm Economy, Weather Outlook, Dairy Production Economics Update, Beef and Dairy Outlook, Consumer Trends, and Farm Tax Update.

Join the faculty from Ohio State University Extension and Ohio State Department of Agricultural, Environmental, and Developmental Economics as they discuss the issues and trends affecting agriculture in Ohio. Each meeting is being hosted by a county OSU Extension Educator to provide a local personal contact for this meeting. A meal is provided with each meeting and included in the registration price. Questions can be directed to the local host contact.

The outlook meeting are scheduled for the following dates and locations:

Date: January 14, 2019 Time: 7:30 am – 10:30 am Speakers: Ben Brown, Barry Ward, Ian Sheldon, Zoe Plakias, Aaron Wilson Location: Emmett Chapel, 318 Tarlton Rd, Circleville, OH 43113 Cost: $10.00 RSVP: Call OSU Extension Pickaway County 740-474-7534 By: January 12th More information can be found at: http://pickaway.osu.edu

Date: January 17, 2019 Time: 8:00 am – noon Speakers: Barry Ward, Ben Brown, Ian Sheldon, Aaron Wilson Location: Der Dutchman, Plain City, 445 S Jefferson Ave. Cost: $15.00 RSVP: Call OSU Extension, Union County 937-644-8117 By: January 10th More information can be found at: http://union.osu.edu

Date: January 24, 2019 Time: 9:00 am – 12:00 noon Speakers: Barry Ward, Ben Brown, David Marrison Location: St Mary’s Hall 46 East Main St. Wakeman, OH 44889 Cost: No Charge; $20.00 if past deadline RSVP: Call OSU Extension, Huron County 419-668-8219 By: January 22nd More information can be found at: http://huron.osu.edu

Date: January 28, 2019 Time: 6:00 pm – 9:00 pm Speakers: Ian Sheldon, Ben Brown, Aaron Wilson Location: Jewell Community Center Cost: $10.00 (after deadline $20.00) RSVP: OSU Extension, Defiance County 419-782-4771 By: January 22nd More information can be found at: http://defiance.osu.edu

Date: January 30, 2019 Time: 9:30 am – 3:30 pm Speakers: Ian Sheldon, Ben Brown, Barry Ward, Dianne Shoemaker, David Marrison, Kenneth Burdine Location: Fisher Auditorium Cost: $15.00 RSVP: Call OSU Extension, Wayne County 330-264-8722 By: January 24th More information can be found at: http://wayne.osu.edu

Date: February 13, 2019 Time: 5:30 pm – 9:00 pm Speakers: Barry Ward, Ben Brown, Ian Sheldon Location: Wayside Chapel, 2341 Kerstetter Rd.,  Bucyrus OH 44820 Cost: $15.00 RSVP: Call OSU Extension, Crawford County 419-562-8731 or email hartschuh.11@osu.edu By: February 5th More information can be found at: http://crawford.osu.edu

Date: March 22, 2019 Time: 11:00 am – 4:00 pm Speakers: Barry Ward, Ben Brown, David Marrison, Ian Sheldon Location: Chamber Ag Day / Ag Outlook meeting, Darke County Romers 118 E Main St., Greenville Registration Flyer: http://go.osu.edu/2019darkeagoutlook Cost: $20 RSVP: Darke County Extension office at 937-548-5215 By: March 16th More information can be found at: http://darke.osu.edu

 

OSU Extension Income Tax Schools Focus on New Tax Law

by: Barry Ward and Julie Strawser, OSU Income Tax Schools

How to deal with the Tax Cuts and Jobs Act—the new tax law for both individuals and businesses–is among the topics to be discussed during the upcoming Income Tax School workshop series offered throughout November and December.

The annual series helps tax preparers learn about federal tax law changes and updates for this year, as well as learn more about issues they may encounter when filing individual and small business 2018 tax returns.

The tax schools are intermediate-level courses that focus on interpreting tax regulations and changes in tax laws to help tax preparers, accountants, financial planners and attorneys advise their clients, he said. The schools offer continuing education credit for accountants, enrolled agents, attorneys, annual filing season preparers and certified financial planners.

This is an important year for tax education as the new tax law creates some challenges for tax practitioners to prepare themselves for the next filing season. Our instructors have great deal of experience and training and the accompanying workbook will be a top reference to prepare tax practitioners to best serve their clients during this transition to the new tax law.

The workbook offers over 700 pages of reference material including reference tables and examples that will be valuable to practitioners. Sample chapters of the reference workbook can be found at:

http://taxworkbook.com/about-the-tax-workbook/

The tax school will also feature a separate, two-hour ethics webinar that will broadcast Dec. 12 at 1 p.m. and again on Dec. 14 at 10 a.m. The webinar is approved by the IRS and will be available to tax school participants enrolled in the two-day tax school at no extra charge.

The registration fee for each workshop is $375, with a $50 late fee if not registered two weeks prior to the school. The fee includes all materials, lunches and refreshments. The deadline to enroll is 14 days prior to the date of each school. Participants can also choose to attend just day one of the workshop for $250. Additionally, the 2019 RIA Federal Tax Handbook and the Wolters Kluwer Master Tax Guide are both available for participants to purchase for a discounted fee of $40 each. Registration information and the online registration portal can be found at:

http://go.osu.edu/taxschools

The tax schools run from 8 a.m. to 4:30 p.m. on the following dates and locations:

  • Oct. 31- Nov. 1 — Ole Zim’s Wagonshed, 1387 State Route 590, Gibsonburg.
  • Nov. 5-6 – Sheraton Suites, 1989 Front St., Cuyahoga Falls.
  • Nov. 7-8 — Ashland University Convocation Center, 820 Claremont Ave., Ashland
  • Nov. 13-14 — Presidential Banquet Center, 4548 Presidential Way, Kettering.
  • Nov. 15-16 — Old Barn Out Back, 3175 W. Elm St., Lima.
  • Nov. 26-27 — Der Dutchman Restaurant, 445 S. Jefferson Rt. 42, Plain City.
  • Nov. 28-29 — Ross County Service Center, 475 Western Ave., Chillicothe.
  • Dec. 3-4 — Ohio University, Zanesville Branch Campus Center, 1425 Newark Road, Zanesville.
  • Dec. 5-6 — The Ohio State University, Fawcett Center, 2400 Olentangy River Road, Columbus.

A daylong webinar on Ag Tax Issues will be broadcast Dec. 17 from 9 a.m. to 3 p.m.

Tax practitioners representing farmers or rural landowners, as well as farmers or farmland owners preparing their own taxes, will benefit from the five-hour webinar. The focus will be key regulations of the Tax Cuts and Jobs Act related specifically to those income tax returns.

Participants can choose between attending a host location or participating at home or in the office. Host locations will provide a facilitator, refreshments and lunch. Participants are encouraged to bring a computer to engage in the real-time Q&A. Participants who choose not to attend a host location, will have a web address emailed prior to the webinar.

Registration, which includes the Ag Tax Issues workbook, is $150. Register by mail or on-line at http://go.osu.edu/AgIssuesReg

More information on the workshops, including how to register, can be found at go.osu.edu/taxschools. Participants may contact Ward at 614-688-3959, ward.8@osu.edu or Julie Strawser at 614-292-2433, strawser.35@osu.edu for more information.

Agricultural Tax Issues Webinar

by: Barry Ward, OSU Extension, Director, OSU Income Tax Schools

Tax practitioners, farmers and farmland owners are encouraged to connect to the Ag and Natural Resources Income Tax Issues Webinar on Dec. 17 from 9 a.m. to 3 p.m. The event is sponsored by Ohio State University Extension and participants can attend the webinar at host locations throughout Ohio or connect at home or office.

The webinar focuses on issues specific to farm tax returns related to agriculture and natural resources, and will highlight key regulations of the Tax Cuts and Jobs Act related specifically to those income tax returns.

The program is an intermediate-level course for tax preparers whose clients include farmers and rural landowners. Farmers who prepare and file their own taxes will also benefit from the webinar.

Topics to be discussed during the webinar include:

New Section 199A 20% Pass-Through Deduction

Learn how pass-through business owners (most all businesses except those organized as C-Corps) can qualify for this new deduction

Farm Loss Deduction Limits

Review the special rules and limits that apply to farm losses and farm net operating losses.

Depreciation of Farm Assets

Discuss new rules impacting the depreciation and expensing of farm assets. Also review the impact of the elimination of IRC § 1031 like-kind exchange treatment for personal property on farm trades.

Farm and Ranch Tax Elections

Identify general rules applicable to making and revoking elections allowed to farm businesses.

Section 199A and Agricultural and Horticultural Cooperatives

Define the new tax law applicable to sales by patrons through cooperatives.

Farm Lease Income and the QBI Deduction

Application of the QBI Deduction to farm lease income.

Entity Considerations

Review entity planning considerations for farm clients necessitated by the new tax law.

Involuntary Conversions:

Involuntary conversions may be the result of a condemnation, a sale under a threat of condemnation, sales of livestock due to weather conditions, or a casualty. The webinar will describe the tax rules associated with these dispositions.

Taxation of Wetland Mitigation Credits

Discuss how wetland mitigation credits are created and how credits might be taxed upon sale or disposition by farmers and ranchers.

Commodities Futures and Options Contracts

Review the tax implications of hedging transactions and options contracts.

Non-Cash Transactions

Identify some of the common challenges associated with non-cash transactions—such as commodity gifts and wages, bartering, and non-cash patronage dividends—and discusses their tax consequences.

Tax Implications of Payments from Energy Companies

Explore the tax treatment of various payments that a landowner or mineral owner may receive from oil and gas exploration, drilling activity, or from wind or solar energy produced on his or her land.

Case Study with Forms

Presentation with a typical farm client and walk through form preparation for that client’s tax return.

The cost for the one-day school is $150, and applications have been made for the following continuing education credits:

  • Accountancy Board of Ohio, CPAs (6 hours)
  • Office of Professional Responsibility, IRS (6 hours)
  • Supreme Court of Ohio, Attorneys (5 hours)

Registration includes the Agricultural Tax Issues workbook. The deadline to register is Dec. 6 to ensure participants will receive the workbook in the mail before the workshop. The live webinar, which will also feature a real-time Q-and-A, can be viewed at several host locations statewide and will include lunch.

Participants also have the option to view the webinar from home if unable to attend a host location.

For those who choose not to attend at a host location, a web address for the webinar will be sent in advance of the Dec. 17 presentation.

Host locations include:

Auglaize County, OSU Extension Office, 208 S. Blackhoof St., Wapakoneta

Clermont County, OSU Extension Office, 1000 Locust St., Owensville

Miami County, OSU Extension Office, 201 W. Main St., Old Courthouse, Troy

Putnam County, OSU Extension Office, 1206 E. Second St., Ottawa

Wayne County, Fisher Auditorium, 1680 Madison Ave., Wooster

Wyandot County, Elks Lodge, 320 E. Wyandot Ave., Upper Sandusky

More information on the workshop, including how to register, can be found at go.osu.edu/agissuesreg

Contact Barry Ward at 614-688-3959, ward.8@osu.edu or Julie Strawser at 614-292-2433, strawser.35@osu.edu with questions.

Grants and Low-Interest Loans for Ohio Small Farms

by: Eric Barrett, Assistant Professor

Are you looking for funding for a new venture on the farm? Are you interested in doing a research project to try something new on your farm?

OSU Extension has a new factsheet on Ohioline.osu.edu to help you find funding sources that match the ideas you have for your farm. The most difficult part of preparing to apply for these programs is developing a business plan. The factsheet includes information on where to get help with a business plan and where to find enterprise budgets to help develop the plan. The OSU South Centers has a website with templates and other information, a Small Business Toolbox to help you get your plan down on paper. The toolbox is located at: http://go.osu.edu/plans.

Grants to support current farming operations are difficult to find, but more available when it comes to trying a new idea. Most grant programs offer funding for research ideas, new ventures on the farm and ways to add value to products grown or produced on the farm. Many Ohio farmers have found the USDA Sustainable Agriculture Grant Program to be a fruitful funding opportunity for project ideas.

Low interest loan programs support all types of family farming operations. The factsheet explains types of loans and gives examples of where to start the search. One example is the AgriLink Deposit Program through the Ohio Treasurer’s Office that helps Ohio farmers get a lower interest rate by partnering with local banks.

The factsheet includes the names and information to use in internet searches to find the right program fits the needs of your farming operation and your ideas.

For complete details, you can read the factsheet at:

http://go.osu.edu/grantsloans

Farm Business Analysis and Benchmarking

by: Clint Schroeder, OSU Extension

As we turn the page from winter to spring we welcome the longer days and the warmth the sunshine brings us.  In farm country this is the time of year that hope is supposed to spring eternal.  As farmers head to the fields, they may not be as optimistic as previous years.  Although we’ve seen a nice winter rally in the grain markets, USDA forecasts are still predicting net farm incomes to decrease to the lowest levels since 2006.  Much of the talk on the winter meeting circuit focused on the importance of knowing your cost of production.  OSU Extension’s Barry Ward is forecasting higher energy prices with most other input costs staying flat to slightly higher.  Rising interest rates, high health care costs, a strong dollar, and the potential for uncertainty with our trading partners are doing little to brighten the mood.  The dim outlook coupled with already razor thin profit margins are starting to remind some of the more seasoned producers of the 1980’s farm crisis.

The farm crisis of the 1980’s saw land values plummet as many operations were unable to pay high interest rates and saw their farms foreclosed on.   It is estimated that nationwide around 300,000 farms were put out of business during the decade.  The fallout led to the creation of the Farm Financial Standards Task Force in 1989.  Their job was to develop standardized guidelines for agricultural producers.  Today, the name has changed to the Farm Financial Standards Council (FFSC), which currently uses 21 financial guidelines to evaluate farm data.  These guidelines are used by banks and lenders to help make decisions on extending credit to farms.  While the backstory might be a little bit of the unknown to producers, the terms liquidity, working capital, solvency, and several others are not.

While farmers have been relying on OSU Extension for help with developing nutrient management plans, herbicide plans, and analyzing data from on farm research, they have not yet realized the full potential of farm financial planning.  A grant was awarded from the USDA National Institute of Food and Agriculture (NIFA) to expand access to farm business analysis and benchmarking resources with the goal of helping Ohio farmers gain a better understanding of their financial health.  The program gives producers a farm finance scorecard that shows how they stack up in each of the FFSC’s 21 categories.  These numbers are then shown on graphs showing the trend from previous years for that specific operation, as well as their standings compared to the national average of all farms that submit their records.  Benchmark reports are used to identify successes and opportunities to improve.   Each farm that participates in the analysis program will receive personalized benchmark reports that include their farm’s numbers.  These individual values are then highlighted to show where their farm falls in the benchmark report for each item compared to participating Ohio farms.

Farm Business Analysis isn’t just for farms focusing on grain production.  There is a large network of dairy farms, primarily in Eastern Ohio, already participating. When multiple enterprises are present, the analysis can help producers allocate expenses between different areas in their operation.  Whether the farm wants to compare their crops on owned versus rented land, their crop operation compared to their livestock, or the profitability of an individual crop or custom farming operation there are tools available to analyze the data provided.  It has been estimated that the value of the benchmarking data, financial scorecard, and enterprise analysis is well over $1000.  Thanks to the grant from USDA National Institute of Food and Agriculture, OSU Extension is able to provide this service at a cost of only $100.  Several lenders have also stepped up and agreed to reimburse operations that successfully complete an analysis.

If you would like more information on the program, visit our website at https://farmprofitability.osu.edu  There you will find the completed business summaries for previous years and other resources that can help farm businesses.  The Farm Business Analysis team has also grown from the original location in Mahoning County with the addition of four new regional technicians.  To learn more about Farm Business Analysis, contact the technician closest to you:

  • Defiance County:  Clint Schroeder, 419.782.4771, schroeder.307@osu.edu
  • Licking County: David Grum, 740.670.5315, grum.1@osu.edu
  • Miami County: Sharon Harris, 937.440.3945, harris.2835@osu.edu
  • Pickaway County: Trish Levering, 740.474.7534, levering.43@osu.edu
  • Mahoning County (Headquarters): Christina Benton, 330.533.5538, benton.132@osu.edu
    • Program Coordinator: Haley Shoemaker, 330.533.5538, shoemaker.306@osu.edu
    • Field Specialist: Dianne Shoemaker, 330.533.5538, shoemaker.3@osu.edu

Values on Agricultural Land Are Expected to Decline by 11.2%/ acre on Average

Ani Katchova, Associate Professor and Farm Income Enhancement Chair

Robert Dinterman, Postdoctoral Researcher in the Department of Agricultural, Environmental, and Development Economics

There are two types of tax values that are on the minds of farmers: market value (the value per acre for highest and best potential use) and current agricultural use value.  Farmers who farm more than 10 acres and participate in the Current Agricultural Use Value (CAUV) program typically benefit from lower tax bills because tax is calculated based on below true market values.  The program began in 1973 with the intention of leveling the playing field for farmers by computing farmland values based on crop yield, soil conditions, interest rates, and crop prices that have proven to be volatile.

Projections just released by agricultural economists in the College of Food, Agricultural, and Environmental Sciences (CFAES) forecast that agricultural land is expected to see a decline of around 11.2% from 2017 values that averaged around $1,153.  The projected average 2018 CAUV value is expected to be $1,023 per acre for the 24 counties in Ohio receiving either reappraisals or adjustments to their properties’ assessed value.

Ani Katchova, Associate Professor and Farm Income Enhancement Chair, and Robert Dinterman, Postdoctoral Researcher in the Department of Agricultural, Environmental, and Development Economics are releasing their projected CAUV values months before the Ohio Department of Taxation will release the official CAUV values.  They say the reduction will help farmers lower their expenses and help stabilize declining farm incomes.

“It is good news for farmers because it will reduce their tax bill,” says Katchova. “Adjustments to assessed values occur once every three years and this represents a 26.3% decrease from the 2015 average CAUV value of $1,388 which had been the assessed value for the past 3 years for counties receiving an update in 2018.”

Dinterman explains further, “these same 24 counties saw their taxes rise in 2014 due to rising commodity prices and a falling capitalization rate.”

He furthers that CAUV values are anticipated to be even lower in the future, because we still have the phase in process and the CAUV formula is based on seven-year averages of several inputs.  CAUV has undergone significant changes to its formula in the past few years – mostly by changing its formula for the capitalization rate – which impacts the OSU agricultural economists’ projections for the 2018 CAUV values.

To calculate the projected values, Dinterman and Katchova used official Ohio Department of Taxation and USDA data, and data on non-land costs.  The Ohio State agricultural economists anticipate that the decline in CAUV values for 2018 will be a continued trend for at least the next 3 years.

Even though the average value of CAUV is expected to decline by 11.2%, not all soil types will decline by the same percent.

“CAUV is calculated for each of over 3,400 soil types in Ohio,” Dinterman clarifies. “And the factor that differentiates the soil types is how much corn, soybeans, or wheat the soil is expected to produce. Farmland with higher expected yields will be more affected by these CAUV changes than farmland with lower productivity.”

Katchova and Dinterman caution that their projections are not the official Ohio Department of Taxation estimates. They claim it is possible for the average CAUV value to decline by as much as 20.6% while it is also possible for the average CAUV value to rise by over 20.6%. However, an increase is viewed as unlikely.

Tax Webinar for Farmers and Farmland Owners

by Barry Ward, OSU Extension, Director, OSU Income Tax Schools

Are you getting the most from your tax return? Farmers and farmland owners that wish to increase their tax knowledge should consider this webinar that will address tax issues important to them. Mark your calendars for January 29th, 2018 to participate in this 2 hour webinar from 10 am to noon.

The webinar, which focuses on tax issues specific to farmers and farmland owners will offer insight into topics such as new and proposed tax legislation as well as buying and selling farmland.

OSU Income Tax Schools which are a part of OSU Extension and the College of Food, Agricultural and Environmental Sciences will offer this webinar on January 29th from 10-noon.

The two-hour program, which will be presented in a live webinar format, is targeted towards farmers and farmland owners who file their own farm taxes or simply wish to arm themselves with more tax information that will help them to better plan for tax filing.

Topics to be discussed during the webinar include:

  • New and Proposed Tax Legislation
  • Ag Income and Expenses
  • Net Operating Losses
  • Buying and Selling Farmland
  • Rental Property
  • Demolition of Structures

The cost for the webinar is $35. To register for this live webinar, go to https://farmoffice.osu.edu/osu-income-tax-schools

Registration will be open on December 15th.

The OSU Income Tax School Program is a part of OSU Extension and the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.