OSU Extension Announces Two-Day Tax Schools for Tax Practitioners & Agricultural & Natural Resources Income Tax Issues Webinar
Barry Ward & Julie Strawser, OSU Income Tax Schools
Dealing with the tax provisions of the COVID-related legislation for both individuals and businesses are among the topics to be discussed during the upcoming Tax School workshop series offered throughout Ohio in November and December.
“The annual series is designed to help 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 2021 tax returns,” said Barry Ward, Director of the Ohio State University Income Tax School Program.
“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 certified public accountants, enrolled agents, attorneys, annual filing season preparers, and certified financial planners. Continue reading
Join OSU Extension Faculty and Staff on Friday, October 15 from 10:00 a.m. to 12:00 p.m. as we discuss current farm management and legislation issues.
Details and registration link are available at https://go.osu.edu/farmofficelive. Below are this week’s topics:
- Introducing…..Seungki Lee, new Ag Economist
- Federal Legislative Update
- Farm Tax Implications from Federal Legislative Proposals
- State Legislative Update
- Ohio Farm Business Analysis 2020: Costs & returns for corn, soybeans, and wheat
- Crop Costs and Margins for 2022
- Farm Office Program Updates
- Panel Discussion: Considerations for End of Year Tax Planning with returning Special Guest Robert Moore, Esq.
We hope to see you at this virtual session!
By Peggy Hall, OSU Extension Educational Lawyer
Monday marked the effective date for new laws in Ohio addressing utility-scale solar and wind facilities. As a result of Senate Bill 52, the new laws expand local involvement in the siting and approval of these facilities, as follows:
- County commissioners may designate “restricted areas” where such facilities may not locate.
- County citizens may petition for a referendum to approve or reject restricted area designations.
- Developers must hold a public meeting overviewing a proposed facility in the county where it would locate.
- County commissioners may prohibit or limit a proposed wind or solar facility after learning of it at the public meeting.
- County and township representatives must sit on the Ohio Power Siting Board committee that reviews facility applications.
The new laws also require wind and solar developers to submit decommissioning plans and performance bonds to address the removal of a facility at the end of its lifetime.
To help explain the laws, Eric Romich and I have developed the law bulletins and videos you see below. We also have a podcast that Amanda Douridas and Elizabeth Hawkins recorded with us. You’ll find all resources on the Farm Office website at go.osu.edu/energylaw. Also on that page are the Farmland Owner’s Guide to Solar Leasing and our Solar Leasing Checklist.
From the RMA Website
WASHINGTON, June 1, 2021 – Agricultural producers who have coverage under most crop insurance policies are eligible for a premium benefit from the U.S. Department of Agriculture (USDA) if they planted cover crops during this crop year. The Pandemic Cover Crop Program (PCCP), offered nationally by USDA’s Risk Management Agency (RMA), helps farmers maintain their cover crop systems, despite the financial challenges posed by the pandemic.
The PCCP is part of USDA’s Pandemic Assistance for Producers initiative, a bundle of programs to bring financial assistance to farmers, ranchers, and producers who felt the impact of COVID-19 market disruptions.
“Cultivating cover crops requires a sustained, long-term investment, and the economic challenges of the pandemic made it financially challenging for many producers to maintain cover crop systems,” said RMA Acting Administrator Richard Flournoy. “Producers use cover crops to improve soil health and gain other agronomic benefits, and this program will reduce producers’ overall premium bill to help ensure producers can continue this climates-smart agricultural practice.” Continue reading
by: Chris Zoller, Extension Educator, ANR, Tuscarawas County
Liquidity is the ability of a farm business to quickly convert current assets to cash to pay short-term (less than 12 months) cash obligations, debt, family living, and taxes. It is one of several measures used to gauge farm financial performance over time. The United States Department of Agriculture Economic Research Service (USDA-ERS) is forecasting a decline in farm sector liquidity in 2021. This article will discuss working capital, current ratio, and times interest earned ratio financial measures.
Working capital is calculated by subtracting current liabilities from current assets. Let’s assume a farm has $300,000 in current assets and $175,000 in current liabilities. This farm has $25,000 ($300,000 – $175,000) in working capital. There is no standard dollar amount of working capital needed for businesses as it will vary by farm size. Comparing total working capital to gross revenues does provide an indicator of whether a farm’s working capital is “enough”. USDA-ERS forecasts a 13.6% decline in working capital in 2021 from 2020. If realized, this would be the largest decline since 2016. Continue reading
By: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker, and Julie Strawser – Ohio State University Extension
“Farm Office Live” continues this winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis and other related issues from faculty and educators with the College of Food, Agricultural, and Environmental Sciences at The Ohio State University.
Each Farm Office Live begins with presentations on select ag law and farm management topics from our specialists followed by open discussions and a Q&A session. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning or can catch a recording of each program.
The full slate of offerings remaining for this winter are:
- March 10th, 7:00 – 8:30 pm
- March 12th 10:00 – 11:30 am
- April 7th, 7:00 – 8:30 pm
- April 9th, 10:00 – 11:30 am
Topics to be addressed in March include:
- Coronavirus Food Assistance Program (CFAP)
- Proposed “American Rescue Plan of 2021” – New Stimulus Legislation
- General Legislative Update
- Ohio Farm Business Analysis – A Look at Crops
- Ohio Cash Rental Rates: Outlook and Discussion on Lease Alternatives
To register or view past recordings, visit https://go.osu.edu/farmofficelive
For more information or to submit a topic for discussion, email Julie Strawser at email@example.com or call the Farm Office at 614-292-2433. We look forward to you joining us!
Now is the time to make your decision about whether you will use ARC or PLC for your operation in 2021. March 15 is THE LAST day to make what is likely one of the most important business decisions you will make for your farming operation this year. Please contact your FSA County office to set up an appointment today. There will not be an extension of this deadline. Producers who fail to elect either Agriculture Risk Coverage (ARC) or Price Loss Coverage (PLC) by March 15, 2021, will NOT receive a 2020 payment and their 2021 election will default to the prior farm bill election.
Ohio FSA Service Center Status:
Many USDA Service Centers in Ohio continue to restrict in-person office visits. However, all Service Centers remain open for business and our staff will be in the office and will work with our producers by phone, by email, or by using other online tools. All Service Center visitors wishing to conduct business FSA should call ahead and schedule an appointment.
The produce safety team has a March 18 online GAPs training scheduled this winter. These programs are free to attend.
You can find more information at https://producesafety.osu.edu/events. Registration link for March 18 event:
Mar 18, 6:00-9:00pm: register at https://go.osu.edu/gapstraining3-18
GAPs Training Webinar Flyer 2021 – 3.18
What is GAP Training?
This is a 3-hour educational course that covers good agricultural practices or GAPs. GAPs training provides growers with the knowledge and tools needed to implement on-farm best management practices to reduce on-farm microbial food safety hazards. Participants will receive a certificate of completion at the end of the training.
by: Chris Zoller, Extension Educator, ANR in Tuscarawas County
The United States Department of Agriculture Economic Research Service (USDA-ERS) on February 5th released their projection for U.S. farm income in 2021. Farm income is projected to fall this year primarily because government payments received by farmers are expected to decline to $21.8 billion (46.3%) after increasing $24 billion (104%) in 2020 (see Figure 1).
Figure 1. U.S. Net Farm Income and Net Cash Farm Income, 2000 – 2021 Forecast
Net cash farm income (NCFI) is calculated by subtracting cash expenses from gross income. This figure is expected to grow 23.7% in 2020 but drop by $10.4 billion (7.5%) in 2021. Net Farm Income (NFI) is considered a broader measure of profitability that includes changes in inventories, depreciation, and gross imputed rental income. Like NCFI, the U.S. NFI is expected to increase in 2020 and decline 9.7% to $111.4 billion in 2021. If this happens, it will be the first time since 2016 that NFI has fallen. However, NCFI and NFI would remain above their respective averages during the 2000 – 2019 period. A bright spot from the USDA-ERS report is that farm commodity cash receipts are expected to increase by 3.6% in 2021.
Based on these projections, budgeting is going to be very important for 2021. Ohio State University Extension has corn, soybean, and wheat budgets available here: https://farmoffice.osu.edu/farm-mgt-tools/farm-budgets. I encourage you to use your financials and these budgets as a planning tool. Scheduling an appointment with your lender, accountant, and Extension Educator to discuss options will be time well spent.
by David Marrison, OSU Extension
In accordance with the Regulatory Freeze Pending Review memo issued by the White House on January 20, the United States Department of Agriculture has suspended the $2.3 billion of additional assistance to the Coronavirus Food Assistance Program put in place during the final days of the Trump Administration.
The Trump administration had previously announced on January 15 providing additional assistance of CFAP expanding eligibility for some agricultural producers and commodities as well as updating payments to accurately compensate some producers who already applied for the program. The expanded eligibility was targeted primarily for contract pork and poultry producers and others previously excluded from the relief payments. Continue reading
By David Marrison, Peggy Hall, and Jeffrey Lewis
Planning For Future Farm Webinar
OSU Extension will host a virtual three-part “Planning for the Future of Your Farm” workshop on February 15, 22, and March 1, 2021, from 6:30 to 8:30 p.m. via Zoom. This workshop will challenge farm families to actively plan for the future of the farm business. This workshop is designed to help farm families learn strategies and tools to successfully create succession and estate plan that helps you transfer your farm’s ownership, management, and assets to the next generation. Learn how to have crucial conversations about the future of your farm. Continue reading
by: Barry Ward, Leader, Production Business Management/Director, OSU Income Tax Schools
Congress passed the Consolidated Appropriations Act (CAA), 2021 on Monday, December 21, 2020, which was signed by the President on December 27th. The CAA funds the government through September 30, 2021, implements COVID-19 relief provisions, and extends a number of expiring tax provisions. The $2.3 trillion bill provides $900 billion in COVID-19 relief. This article highlights key provisions for farm-related issues from several Acts within the CAA’s 5,593 pages.
Additional 2020 Recovery Rebates
“Economic Impact Payments”
The Act provides for “additional 2020 recovery rebates for individuals.” The additional recovery rebate credit is $600 for “eligible individuals” or $1,200 for “eligible individuals” filing a joint return. “Eligible individuals” are entitled to a $600 credit for each “qualifying child”. (Generally includes dependent children under the age of 17.) Phaseouts apply to higher-income taxpayers. Continue reading
Both the Paulding County Extension Office and the Statewide Extension Office will be hosting a series of online Farm Bill Meetings. Our Paulding County meeting will include information from the local FSA Office with specific county information and updates. The statewide series will have much of the same information without our local contacts. See the statewide flyer listed here: 2021 ARC.PLC Flyer Statewide
For the local Paulding County meeting, it will be held via ZOOM on Friday, January 29 from 7:30 AM until 8:30 AM during the monthly Paulding County Virtual Coffee Shop. The registration is located at go.osu.edu/pauldingFB21. Registration is required. I will be recording this session and placing it on the Paulding County Extension YouTube Channel.
A few reminders and questions I have received in the office:
- With the 2018 Farm Bill participants now have the election to choose programs yearly. The deadline for signing up for the calendar year 2021 program is March 15. (This now aligns with the crop insurance deadline.)
- The opportunity to update the PLC yield on your base acres was only available last year. This is not an option for 2021. This additionally usually required the signature of the landowner and this is not the case for the program elections of PLC, ARC-CO, or ARC-IC in 2021. FSA in Paulding County will be mailing contracts to those producers who elected to sign a 5-year contract. These will need to be signed and returned.
- In the calendar year 2020, one was signing up for both the 2019 and 2020 program by March 15, 2020. This decision for 2021 will be made by March 15, 2021, and is more difficult to predict payment potential. The marketing year doesn’t start until after September 1, 2021, for corn and soybeans. Also, the PLC and ARC-CO programs are based upon base acres on the farm not what the producer is planting. ARC-IC is based upon what the producer is planting.
- Due to the prevent plant season and delay of the 2018 Farm Bill, many producers had the opportunity in 2020 to elect program choices of ARC-CO, PLC, and ARC-IC for the 2019 and 2020 crop year. With the heavy number of preventing plant acres in NW Ohio in 2019, many farms elected ARC-IC. This program may or may not be attractive for the 2021 calendar year (election producers are making currently) based on different scenarios.
- Remember payments are made for the following year for the current program year (i.e. – in September 2021, producers will receive payments for the 2020 election choices)
- If a producer does not make an election by March 15, the decision will stay the same as the prior-year as long as a contract is signed and approved. Again ARC-IC may not be your best option.
- These programs are another form of risk management on the farm. I recommend that producers are not using this as a guaranteed payment and looking at it as a gift if payment is received. With our current high prices, I would not necessarily bank on a payment.
- If a producer is looking at the Supplemental Coverage Option (SCO) – Crop Insurance. The only Farm Bill program that will allow you to purchase this type of insurance is electing the PLC program option.
Locally from the Paulding County FSA Office.
- The FSA Office is still closed to the public but there are many options for getting paperwork for the Farm Bill or other programs turned in.
- The office is in a bit of a transition as director Phil Lautenschlager has taken the director position in Hardin County. Left in the office full time is Kaye Brofford (firstname.lastname@example.org)and Neil Beining (email@example.com) and part-time is Kasey Mills (firstname.lastname@example.org).
- If the producer does not initiate a call to the FSA to make Farm Bill changes the program will stay with what was elected in 2020.
- Please do not wait until the last minute (March 15 to sign up for the Farm Bill programs).
- The phone number for the FSA office is (419)399-3841, choose option 2 for FSA Office.
Agricultural producers and private landowners interested in the Conservation Reserve Program (CRP) can sign up for the popular program beginning today, Jan. 4, 2021, until Feb. 12, 2021. The competitive program, administered by USDA’s Farm Service Agency (FSA), provides annual rental payments for land devoted to conservation purposes.
Through CRP, farmers and ranchers establish long-term, resource-conserving plant species, such as approved grasses or trees, to control soil erosion, improve water quality and enhance wildlife habitat on cropland. Farmers and ranchers who participate in CRP help provide numerous benefits to their local region and the nation’s environment and economy. CRP general signup is held annually and is competitive; general signup includes increased opportunities for wildlife habitat enrollment through the State Acres For Wildlife Enhancement (SAFE) initiative. Continue reading
By: Barry Ward, Director, OSU Income Tax Schools & Leader, Production Business Management
Do you need a resource to answer those tough farm tax questions? If so, you can access the Farmer’s Tax Guide (IRS Publication 225) online at https://www.irs.gov/pub/irs-pdf/p225.pdf The 2020 Farmer’s Tax Guide explains how federal tax laws apply to farming. This guide can be used as a guide for farmers to figure taxes and complete their farm tax returns.
The explanations and examples in this publication reflect the Internal Revenue Service’s interpretation of tax laws enacted by Congress, Treasury regulations, and court decisions. However, the information given does not cover every situation and is not intended to replace the law or change its meaning.
Some of the new topics for the 2020 tax year which are included in this publication are: Tax treatment of Coronavirus Food Assistance Program (CFAP) payments, Payroll Protection Program (PPP) Loans and Forgiven Debt, Increased section 179 expense deduction dollar limits, COVID-19 related employment tax credits, and other tax relief, Redesigned Form W-4 for 2020, New Form 1099-NEC, and much more.
Hardcopies of the 2020 Farmer’s Tax Guide are also available at select county OSU Extension offices.
The Rural Tax Education Site has additional resources for agriculturally related income and self-employment tax information that is both current and easy to understand: https://ruraltax.org/
by: Barry Ward, David Marrison, Peggy Hall, Dianne Shoemaker – Ohio State University Extension
“Farm Office Live” returns virtually this winter as an opportunity for you to get the latest outlook and updates on ag law, farm management, ag economics, farm business analysis, and other related issues from faculty and educators with the College of Food, Agriculture and Environmental Sciences at The Ohio State University.
Each Farm Office Live will start off with presentations on select ag law and farm management topics from our experts and then we’ll open it up for questions from attendees on other topics of interest. Viewers can attend “Farm Office Live” online each month on Wednesday evening or Friday morning or can catch a recording of each program. The full slate of offerings for this winter:
- January 13th, 7:00 – 8:30 pm
- January 15th, 10:00 – 11:30 am
- February 10th, 7:00 – 8:30 pm
- February 12th 10:00 – 11:30 am
- March 10th, 7:00 – 8:30 pm
- March 12th 10:00 – 11:30 am
- April 7th, 7:00 – 8:30 pm
- April 9th, 10:00 – 11:30 am
Topics to be addressed this winter include:
- Outlook on Crop Input Costs and Profit Margins
- Outlook on Cropland Values and Cash Rents
- Outlook on Interest Rates
- Tax Issues That May Impact Farm Businesses
- Legal trends for 2021
- Legislative updates
- Farm business management and analysis updates
- Farm succession & estate planning updates
Who’s on the Farm Office Team? Our team features OSU experts ready to help you manage your farm office:
- Peggy Kirk Hall — agricultural law
- Dianne Shoemaker — farm business analysis and dairy production
- David Marrison — farm management
- Barry Ward — agricultural economics and tax
Register at https://go.osu.edu/farmofficelive
We look forward to you joining us this winter!