IRS Regulations Impact Hoosier Farmers

Posted by on Jul 31, 2015 in Tax Tips | Comments Off on IRS Regulations Impact Hoosier Farmers

Jeff Baker is now a featured contributor for the Indiana Prairie Farmer website, offering insights regarding recent IRS regulation changesThe magazine is a leading publication in the agricultural industry and is a member of the Farm Progress family of publications. Indiana Prairie Farmer magazine has been a trusted resource for Hoosier farmers since 1841.

If you missed the magazine articles, you can access the content via the Indiana Prairie Farmer online archive. Click the links below to learn more about changes in IRS regulations.

What You Need to Know About Farm Deductions

In past years, most farmers deducted materials and supplies as they were purchased. Changes in IRS tax code now allows farmers to make deductions for non-incidental material supplies during the year of purchase (less than $500), but the changes also require that invoices for these items above that threshold be capitalized and depreciated. To do so, taxpayers must attach a statement of election on their tax returns. To learn more, click here.

IRS Changes Impact Repair and Maintenance Tax Deductions

New IRS regulations create a “Small Building Safe Harbor” that allow taxpayers to write off expenditures for repair improvements if they meet specific qualifications. There are also mandatory changes related to routine repairs and equipment maintenance for farms. Read Jeff’s take here.

Farm Expenses and Your Taxes

Expenses for repairs and maintenance that falls outside of the IRS’s safe harbors are to be evaluated with a three stage BAR test. The test’s stages ask questions about betterment, adaptation, and restoration. In order to deduct a routine repair or maintenance expense, the taxpayer is required to have been using the equipment when the need for repair occurred. Discover how the BAR test affects your taxes here.

Farm Advice You Can Rely On

Baker Retirement & Wealth Management, PC has been serving farmers in the greater Evansville area for nearly thirty years. The Baker team understands the agriculture industry and can provide important advice about regulations, taxes, and more. Contact the Baker team today by calling 1-866-244-3517.

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