Don't Wait Until December: Mid-Year Tax Moves for Farmers and Ranchers

While many farmers and ranchers leave tax strategies on the back burner until winter, true tax savings can happen during the summer growing months. In this "Grow Together" webinar, Jessica Lehmen, CPA and Tax Partner at Williams-Keepers LLC, shared actionable mid-year steps to eliminate year-end surprises and protect your bottom line.

Rather than trying to predict a future harvest, successful tax planning relies on organizing what your operation already knows today.

Key Takeaways from Jessica’s Session 

• Build Your Baseline: Focus on fixed figures you know right now, including current debt obligations, major lease payments, required reasonable compensation and existing depreciation schedules provided by your CPA.
• The Summer Equipment Rule: Remember that out-of-pocket cash paid does not equal your new tax basis. Keep meticulous records of both the total purchase price and the trade-in allowance for any equipment changes.
• Track Revenue and Input Timing: Monitor grain currently held in storage, classify livestock sales properly (ordinary weight vs. 1231 capital gains) and audit prepaid inputs so you don't accidentally double count them at year-end.
• Use Rainy Days: Use summer weather delays to update QuickBooks or accounting software. Keeping up with bookkeeping now ensures your year-end meetings focus on strategic choices rather than paper shuffling.

Summer Pro-Tip: Collect W-9s Early 

While the federal 1099 reporting threshold recently increased to $2,000, compliance is much smoother if you collect a completed W-9 from independent contractors or seasonal labor before issuing their first check.