December 3, 2002
Purdue workshop makes tax code less taxing for farmers
WEST LAFAYETTE, Ind. It is said only two things in life are certain: death and taxes. Perhaps a third item should be added to the list changes in tax laws.
Keeping current with new wrinkles in the U.S. tax code each year is challenging enough for tax professionals, but for farmers the task can be, well, taxing.
A free Purdue University-sponsored workshop will explain tax changes and how the new provisions could impact a farmer's tax liability. "Income Tax Management for Farmers in 2002" will be broadcast at various county offices of the Purdue Cooperative Extension Service from 7-9 p.m. EST Tuesday (12/10).
George Patrick, a Purdue agricultural economist and tax specialist, and David Frette, a Washington, Ind., certified public accountant, are the featured speakers.
"We'll be talking about some of the tax changes that affect farmers, then review special tax treatment with respect to weather-related income items, crop insurance payments, disaster assistance and excess sales of livestock," Patrick said. "After that we'll talk quite a bit about depreciation alternatives and try to cover the important things that we think farmers should be aware of as they do their year-end tax planning."
Farmers usually file and pay their taxes by March 1 to avoid making estimated tax payments, Patrick said. Those who file early often do their tax planning in December.
Again this year farmers will notice several differences in tax laws when they sit down at the kitchen table to figure their taxable income.
"I think everybody is confused with tax laws that apply to them, and farmers have a number of special provisions," Patrick said. "One of the big changes is the 30 percent additional first-year depreciation.
"Essentially, a farmer can qualify for an additional 30 percent depreciation on almost anything that they bought during 2002. This would be in addition to the normal Depreciation and Section 179 expensing. It gives a farmer quite a lot of flexibility in terms of what they do in managing their income."
Another major tax change involves government payments. Payment formulas and amounts were revised when Congress passed the 2002 Farm Bill.
"If a farmer has signed up for payments under the new farm bill, they will be eligible to get up to half of their payment for the 2003 crop in this calendar year," Patrick said. "So they need to decide whether they want to take the payment and have it included in income this year, or wait until January and have it included in 2003 income."
Farmers also need to consider the implications of tax policies that affect all taxpayers, including the increase in tax credits for families with children, Patrick said.
"A lot of farmers rely on a tax professional to fill out the forms for them. But they need to know enough about the tax law to know when they should be asking questions," he said.
More than 20 county Extension offices are expected to air "Income Tax Management for Farmers in 2002." Exact locations are still being determined. For the location nearest you, call a county office of Purdue Extension or the toll-free Extension hotline at (888) 398-4636 ext. 44191.
The broadcast is being aired via Purdue's Indiana Higher Education Telecommunication System network.
Writer: Steve Leer, (765) 494-8415, firstname.lastname@example.org
Source: George Patrick, (765) 494-4241, email@example.com
Ag Communications: (765) 494-2722; Beth Forbes, firstname.lastname@example.org; http://www.agriculture.purdue.edu/AgComm/public/agnews/
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Purdue News Service: (765) 494-2096; email@example.com