2009 Tax Year

 April 15^th may be a few months away, but the taxman waits. Having a comprehensive tax planning strategy should be an important part of financial planning for farmers and ranchers, according to an ag economist. A heads up next. 2009 is a critical year for farmers and ranchers when it comes to financial planning as it relates to taxes. George Patrick is an agricultural economist who says farmers and ranchers may consider some new approaches to 2009 tax planning due to income lower than 2007 and 2008 which were record income years for many ag producers. “They may want to reverse some of their normal tax planning.” 

As an example, instead of trying to keep income down for 2009 tax returns: “This may be a year where they want to go ahead and try and take some additional income either to avoid a net operating loss or to have some of it taxed at a fairly low rate to give themselves some additional flexibility for tax management in the future.”

 Typically producers think about purchasing next year’s inputs at the end of the current year…but: “They may want to put those off and the same thing they may want to advance some of their commodities sales, put it in income this year rather than hold off and defer it into 2010.” Obviously consult your tax advisor.