A tax relief package passed by the House of Representatives this week now heads to the Senate for consideration. Micheal Clements shares more on what’s included for farmers and ranchers.
The Tax Relief for American Families and Workers Act
restores tax provisions left out of the 2017 tax reform efforts. American Farm Bureau Federation Government Affairs Director Dustin Sherer says the legislation includes provisions that benefit farmers and ranchers.
Sherer: The biggest of which is 100 percent expensing, or bonus depreciation, which allows you to immediately write off investments in your business when you purchase equipment or build infrastructure. It's probably one of the most pro-growth policies that we can put in the tax code and farmers lost the ability to buy new equipment under 1031 Like Kind Exchanges in the 2017 tax reform.
Clements: Sherer says it’s important lawmakers make the fix now ahead of the 2025 tax cliff.
Sherer: These provisions were only extended for a couple of years from 2017 when they changed, others like bonus depreciation started to phase down. And so, getting this done now, generally, you can make tax policy retroactive for a year before you get too deep in the following year's filing season. And that's what this bill does, that provision and a couple others including deductibility, and R&D expensing, retroactive to the beginning of 2023 before we get deep into this particular filing season.
Clements: Sherer encourages farmers and ranchers to reach out to their Senators and urge them to pass this legislation.
Sherer: Those things affect farmers’ and ranchers’ bottom lines, especially in times of high costs and thin margins. Tell them your story, and let them know that it is vital that they get this done.
Clements: Learn more
at fb.org. Micheal Clements, Washington.