Tax Issues

Begin with a professional (CPA)

  • They must have knowledge of the farm industry

  • They are an integral part of your business

Choose a tax structure

Profitable farms will usually have a tax savings when using a C-Corporation structure

  • C-Corporation

  • S-Corporation

  • Limited Liability Company

Best time to plan is after harvest

  • Use actual crop yields

Result should be a written plan

  • What will be done

  • Expected tax effect

  • No surprises

Self employment tax

  • Individual farmers pay more self-employment tax than income tax

  • Would you choose to keep paying into Social Security

  • Alternatives to fund your own retirement: Ira, Keogh, SEP IRA, Simple IRA

Other payroll taxes