Tax planning is in full swing for farmers and ranchers as this year comes to a close. AgCountry Farm Credit Services Senior Tax Specialist Jason Grunewald says there are certain documents farmers should be gathering to prepare. “There was a lot of PP acres this year, so we’ll want to look at their crop insurance payments and determine if any of that income should be deferred. Also, some farmers received PPP loans. So they’ll want to bring that documentation in, along with expected income and expenses and their projected year-end inventory.” A significant portion of farm income did come from government assistance this year. For tax planning purposes, Grunewald says farmers may have to spend more to get in to a certain tax bracket. “That is a good thing because some operations have had problems generating income the past couple years and have used CCC loans. To generate more expenses and/or shuffle around income, farmers can choose to depreciate machinery or defer grain contracts.” Hear more in this Red River Farm Network interview.
