Talking Taxes for Farmers and Ranchers

Описание: The Importance of Preparation and Professional Help
When it comes to taxes, Dissette’s first piece of advice is simple: do not procrastinate. Gathering accurate information is crucial, as he noted the computer expression, “garbage in equals garbage out”.

According to Dissette, the biggest mistake farmers and ranchers make is missing out on write-offs, which leads to them paying more than their fair share in taxes. To prevent this, he strongly advocates for hiring a professional CPA or tax preparer. He explained that the cost of a professional is well worth it to keep the IRS off your back and to ensure you receive the maximum write-offs available.

Key Changes from the “Big Beautiful Bill”
Dissette highlighted several positive changes stemming from recently passed tax legislation, which he referred to as the “big beautiful bill”. These updates offer substantial benefits for the agricultural sector:

Permanent Tax Cuts: Some of the previously temporary tax cuts have now been made permanent.
100% Bonus Depreciation on Assets: For assets like tractors, machinery, fences, and grain bins placed in service after January 19, 2025, producers can deduct 100% of the cost in the first year.
Bonus Depreciation on Property: A 100% bonus depreciation also applies to specific non-residential real property, such as packing houses and feed mills, placed in service after July 4, 2025.
Permanent QBID: The 20% Qualified Business Income Deduction for pass-through income, which includes agricultural cooperatives, is now permanent, helping to lower overall tax liability.
Income Averaging: If 2025 is a high-income year compared to the previous three years, farmers can utilize an income averaging schedule to potentially lower their tax rate.
Pre-Paid Farm Supplies: Cash-basis farmers can deduct up to 50% of expenses for pre-paid supplies like seed, fertilizer, and feed if purchased before December 31, 2025.
Increased SALT Limits: State and Local Tax (SALT) deduction limits have been raised from $10,000 to $40,000 for the years 2025 through 2029, though there are phase-outs for high earners.
New Vehicle Deductions: For vehicles purchased after December 31, 2024, interest on loans for new, US-assembled cars may be deductible subject to certain limits, a move Dissette noted is intended to protect US manufacturing.
When it comes to specific deductions, Dissette advises producers to simply ask their tax preparer questions so they don’t miss out.