As Congress debates tax policy, agricultural producers still must do tax planning before the end of the year based on the information known at this time.
“It is best to start with year-to-date income and expenses and estimate them for the remainder of the year,” says Ron Haugen, North Dakota State University (NDSU) Extension Service farm economist. “Do not forget any income that was deferred to 2010 from a previous year. Depreciation also needs to be estimated. It is best to try to spread out income and expenses so producers don’t have abnormally high or low income or expenses in any one year. However, caution should be used in deferring too much income because it may push you into a higher tax bracket in a future year.”
The Small Business Jobs Act of 2010 passed by Congress increased the 179 expense election and extended the bonus depreciation.
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