Importance of Tax Planning in Down Years
The common misconception for ag producers is that tax planning is only necessary when the ag economy is doing well and the farmer wants to minimize their tax burden. However, planning during down years is just as important to prevent losing deductions and credits that could be helpful during those tough times. It’s common practice for farmers to hold on to grain when prices are poor but operating expenses are still ongoing. This can cause large variances in income from one year to the next, but proper tax planning can prevent that variance and offset future income.