Reducing Nutrients in Water

Please give the following information a read.  It deals with Regulation 85 and encourages voluntary actions that may prevent future regulations.  For more information address the website in the reading.

Net Worth Spreadsheet

Are you getting ready to have that talk with the banker and need to present your net worth? Try clicking on the Ag Plan Spreadsheet Tool below.  It is pretty user friendly and does all the calculations for you automatically.  See what you think!

Ag Plan Spreadsheet

Tax Reform Information for Farmers

Happy Friday!

I just wanted to pass along some information concerning the new tax bill and how it affects farmers.  The following information came from our Ag Business Management Specialist Jeff Tranel.  Hopefully you find it useful.  There are, of course, still a lot of questions.

All~

The new tax reform act contains some interesting features. The National Farm Income Tax Task Force (of which I am a member) has been sharing information about the signed legislation as it pertains to agriculture.

Many ag related publications have had articles about the “adjustment of taxable income for sales of commodities to cooperatives”. The 20% adjustment would definitely benefit farmers and ranchers if they are able to sell to a cooperative. It could also impact prices. However, like many part of the Internal Revenue Code, the devil is in the details. The following will hopefully give you a taste of how complicated the computations are for producers.

• ·         “Qualified business income” (QBI) must be computed. This includes income from some sources but not from all sources and is slightly different that QBI in other parts of the Internal Revenue Code.
• ·         The deduction for QBI is calculated by first determining “combined qualified business income. This is the lessor of 20% of the taxpayer’s QBI or the larger of 50% of W-2 wages for the trade or business or the sum of 25% of W-2 wages plus 2.5% of the unadjusted basis immediately after acquisition of all qualified property.
• ·         There is a “wage limitation” for the taxpayer.
• ·         Once “combined QBI” has been determined, there is a second limitation for taxable income.

 The signed legislation also includes a deduction for qualified cooperative dividends. While the calculation for this deduction is more streamlined that those calculations for “sales to cooperatives”, it is not straight forward.

Finally, there is “rumor on the street” that Congress is interested in “fixing” this issue. Senator Thune (South Dakota) has publicly said there was no intent to ‘unfairly tip the scales in favor of marketing to one type of business entity or another’.  Further, Thune told reporters ‘right now in terms of the technical fixes, this is the one that probably needs to get fixed the most’.

My thoughts are this: We need to wait for the fixes to occur and for the IRS to interpret the law and provide guidance. A farmer/rancher selling to a coop should remember that the law will change and that he/she should stay in contact with his/her own tax preparer. Finally, (as we always say), a business owners should make MANAGEMENT DECISIONS WHICH ALLOW FOR THE MOST PROFIT -  NOT THOSE THAT SIMPLY REDUCE TAX LIABILITIES!

Thanks.

Jeff

Drought Planning Resources

Happy 2018 Everyone!

I hope you all had a great Christmas and the New Year is chalked full of new and exciting opportunities! 

My vacation was spent doing a lot of welding and finishing some projects.  I also spent time out and about on a few ranches visiting and helping them do some projects.  All of them had 1 thing in common, we need some moisture.

So I thought I would begin the new year getting you some information and resources concerning drought management.  The last ranch I worked on before coming back to extension had a sticky note one the desk by the phone with "PPPPP" written on it.  As you all probably know this is an acronym for Piss Poor Planning Prevents Progress.  Most of you are fully aware how true this saying is and it is especially relevant when it comes to having a drought management plan.

Strategies for Cattle Herd During Drought

The above link was developed by CSU Extension's Ag Business Management Team.  It allows you to plug in numbers and help you build a plan in the hopefully unnecessary event that you need to use it. 

Buy Hay or Sell Cows

This link allows you to plug in numbers to see if it would be more profitable for you to purchase extra hay or whether selling off some cows is the better option.

These are just of the great resources available for you to use from the ABM Website.  There are several other great tools and you can check them out here - ABM Website

We also have literature here in the office concerning drought management strategies.  Please come in any time and we will get you what you need. 

More often than not, you won't need to utilize you drought management plan, but having one ready is a smart management decision!