U of M releases new tax update publication for farm families

By C. Robert Holcomb and Gary Hachfeld, University of Minnesota Extension

ST. PAUL, Minn. (12/31/2007) —The new "2007 Ag Income Tax Update for Farm Families" from University of Minnesota Extension outlines tax law changes affecting farm families.

You'll find it at www.cffm.umn.edu, under “Publications,” then click on “Farm Management Topics.” Check with your regional or county Extension office if you don't have Internet access.

Topics covered include the standard deduction and personal exemption, the federal mileage deduction, health spending accounts, depreciation and self-employment tax.

One notable aspect for 2007 is that the “Section 179 Depreciation Deduction” has been extended. The provision, which was scheduled to expire, was extended as a result of the passage of the Small Business and Working Opportunity Act of 2007. It is in effect through the tax year ending Dec. 31, 2010. This will enable farmers to take advantage of higher depreciation rates. See the “Ag Income Tax Update for Farm Families” for more details.

A section on CRP payments and self-employment tax explains some of the confusing IRS rulings and changes regarding how you are taxed based on your farming status. While the situation may still be in flux, this publication provides important cautions and helps you understand your options.

There is a deferral option for taxes owed on crop insurance proceeds received as a result of destruction or damage or the inability to plant crops because of a natural disaster. “Ag Income Tax Update for Farm Families” gives a real-life example of the formula for computing the deemed revenue the insured received, taking into account multiple factors.

There's also an appendix, which includes federal and state tax rates, references and other information.

Any use of this article must include the byline or following credit line:
C. Robert Holcomb and Gary Hachfeld are educators in agribusiness management with University of Minnesota Extension.

Media Contact: Julie Christensen, U of M Extension Service, (612) 626-4077, reuve007@umn.edu

NOTE: News releases were current as of the date of issue. If you have a question on older releases, use the news release search (upper left-hand column of the News main page) or the main Extension search (upper right of this page) to locate more recent information.

URL: http:// www.extension.umn.edu/extensionnews/2007/agtax.html  This page was updated Dec. 31, 2007 .
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