Jan. 2, 2018
A tax specialist with American Farm Bureau says the tax overhaul signed into law by President Trump will result in lower taxes paid by the vast majority of farmers and ranchers.
Pat Wolff says the new tax code includes lower individual tax rates.
"We know that 94 percent of farmers and ranchers pay taxes as individuals, and those tax rates are coming down," Wolff says. "The bill also maintains all of the important deductions and credits that farmers rely on. So, farmers have all the tools that they've always had to manage their businesses."
New to the tax code, Wolff says, is a deduction for business income.
"Starting next year, farmers and ranchers will be able to take a 20 percent deduction of their business income," she says. "So, if they made 100 dollars, they'll be able to take a 20 dollar deduction. That's new, and that will also help reduce the taxes that are owed."
Wolff says the estate tax, long opposed by Farm Bureau, should no longer be a factor for most farmers and ranchers following changes to the estate tax exemption.
"The bill doubles the estate tax exemption to 11 million dollars per person. At that level, the vast majority of farmers and ranchers won't have to worry about the estate tax anymore."
Most of the new tax provisions are temporary and only last for seven years. Wolff says, starting next year, Farm Bureau will be working to make the tax deductions, the lower rates and the estate tax exemption permanent.