IRS advises farmers and ranchers to check tax law changes

November 06, 2018 - 2:25 am
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The IRS says tax law changes may have a big impact on farmers and ranchers.  IRS spokesperson Michael Devine says it’s good to know what those changes are and how they affect you.

“Net operating losses, under the prior law, those could only be carried forward 20 years,” said Devine. “Now they can be carried forward indefinitely, with some limits. Qualified business income deductions, starting in 2018, taxpayers that are not corporations, may be entitled to deduct up to 20 percent of their qualified business income.”

The rules regarding depreciation have changed, as well.

“Changes in the law allow a taxpayer to recover costs of certain property over the time they use that,” said Devine. “New farming equipment and machinery is now five year property. Used equipment remains seven years, but the big news is, the new law increases the maximum deduction from $500,000 to $1 million.”

Devine says farms and ranches that earn under $25 million in a three-year period can also change their accounting to a cash basis of accounting for tax purposes.  For more details on the changes, go to irs.gov.

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