Agriculture operates in a world of uncertainty. From unpredictable commodity and product markets to fluctuating input prices, running a farm or ranch is challenging under the best of circumstances Farmers and ranchers need a tax code that provides certainty and recognizes their unique financial challenges.
In general, most in Agriculture agree that the new tax law will benefit farmers and ranchers and help stimulate the agricultural economy. One of the highlights is increasing the popular Section 179 small business expensing to $1 million is one of the highlights.
“As farmers and ranchers are buying their equipment and buying their stuff for their operations, they can turn around and expense that immediately. So, they can keep that cash in their pocket and they don’t have to depreciate it over the seven years that it used to be for some of this farm equipment” says Amy Iverson, a WipFli certified public accountant in Billings..
The estate tax was also doubled to $11 million per person or $22 million per couple; another win for Agriculture.
Iverson says “It’s very big. I would say the majority of our agricultural producers are still going to fall within that range. And if not, there’s still plenty of time to do some planning opportunities, some estate planning to get you below that $22 million if you need to be.”
Every farm or ranch operates differently, that’s why she says it’s important that producers visit with their own accountants about how the new tax law will affect them.
“You need to talk to your tax professional. And you need to have that conversation with them of your long-term goals, short-term goals and what this tax bill really means to you. Should you restructure, should you not restructure, you know can you afford to hire somebody or not. You really need to talk to a professional” says Iverson.
Benjamin Franklin coined the phrase that in life only two things are certain: death and taxes. In a crazy twist of irony, it could actually be taxes this time that keep our family farms and ranches from dying. And in a state where Agriculture is the main economic driver, if farmers and ranchers stay in business it helps our communities stay alive too.