Tax Reform and Your 2018 Tax Plan
In the wake of the passage of recent tax reform legislation, there are a number of considerations for farmers as they contemplate their 2018 tax plan, writes Chris Clayton for The Progressive Farmer.
Property Tax Deduction – Under the new legislation, businesses still get to fully deduct property taxes directly related to income.
Charitable Contributions – With the increase in the standard deduction, fewer people will be itemizing their deductions. Farmers might consider charitable contributions in the form of grain, rather than money, due to the changes in Schedule A. In this way, the actual value of the donated grain lowers a farmer’s taxable income, as well as lowering income subject to self-employment taxes.
Equipment and Machinery Trade-Ins – While like-kind exchanges were kept in the tax law for real-estate property, they were ended for personal property. This means that, for example, trading in a tractor is no longer a tax-free exchange. Keep in mind that the changes made in Section 179 and full deductibility of equipment expensing will likely have a number of state-level implications.
For more details, read the article in full at The Progressive Farmer.