With many farm families expecting record farm incomes in 2012, this year’s tax filing will be “critical,” says a Purdue University economist. “Effective income tax planning and management seeks to maximize after-tax wealth and typically involves consideration of receipts and expenditures for multiple years. Increased volatility of both input and output prices has made farm incomes more variable and more difficult to predict,” writes George Patrick in “Income Tax Management for Farmers in 2011.”
Patrick writes that a number of short-term laws enacted the past couple of years is also adding to the tax planning headache, since we really don’t know what the mood in Washington will be during future legislative negotiations. And being an election year, you can be sure that Washington will be even more of a circus.
We’ve also provided some additional resources on TractorLife.com to help with tax planning. We hope these will come in handy as you finalize your 2011 returns.
The bottom line is that you will need to remain vigilant as the season unfolds.
So, what’s the biggest surprise so far as you assemble your returns?