A Christmas Gift for Farmers: Lower Taxes
While you might never guess it from what you hear in the mainstream media, the tax reform bill passed this week will lower tax bills, especially for farmers. Pat Wolff, tax specialist with the American Farm Bureau Federation, says the final bill passed by Congress is a nice holiday gift for farmers, “We know that 94 percent of farmers and ranchers pay taxes as individuals, and those tax rates are coming down.”
Wolff says the reforms will result in lower taxes being paid by farmers starting in 2018, “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.”
In addition, all the deductions and exemptions farmers have had in the past will remain. Wolf says, while the estate tax was not killed, the exemption was doubled to $11 million per person, “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.”