Clements: Congress is providing farmers and ranchers with a last-minute holiday gift: lower tax bills in the future. A tax code overhaul passed by both the House and Senate this week makes many changes to the tax code that will benefit farmers and ranchers. American Farm Bureau Federation tax specialist Pat Wolff says the bill includes lower individual tax rates.
Wolff: We know that 94 percent of farmers and ranchers pay taxes as individuals, and those tax rates are coming down. The bill also maintains all of the important deductions and credits that farmers rely on. So, farmers have all the tools that they’ve always had to manage their businesses.
Clements: New to the tax code, the bill includes a deduction for business income.
Wolff: Starting next year, farmers and ranchers will be able to take a 20 percent deduction of their business income. So, if they made $100, they’ll be able to take a $20 deduction. That’s new, and that will also help reduce the taxes that are owed.
Clements: The estate tax, long opposed by Farm Bureau, should no longer be a factor for most farmers and ranchers following changes to the estate tax exemption.
Wolff: The bill doubles the estate tax exemption to $11 million per person. At that level, the vast majority of farmers and ranchers won’t have to worry about the estate tax anymore. Most of the provisions are temporary, they only last for seven years. So, starting next year, Farm Bureau will be working to make those important tax deductions, the lower rates and the estate tax exemption permanent.
Clements: Micheal Clements, Washington.
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