The start of 2015 brought with it the expiration of many temporary tax provisions important to farmers and ranchers. Prompt congressional action is needed to reinstate and make permanent these policies that improve the economic viability and stability of food, fiber and fuel production.
The Montana Farm Bureau is urging Congress to vote on extending expired tax provisions as soon as possible. Two of those two provisions are of particular interest to farmers and ranchers: Section 179 Small Business Expensing and Bonus Depreciation.
Section 179 Small Business Expensing allows a taxpayer to deduct the cost of new or used business property in the near term rather than depreciating the cost over a longer period of time. For 2014, the maximum deduction was $500,000. Unless this rate is extended, the maximum deduction for 2015 will be $25,000. Both Section 179 and Bonus Depreciation help farmers and ranchers continually replace and upgrade farm equipment, buildings and storage facilities to remain profitable and competitive.
“Farmers and ranchers need these tax tools to help them make business purchases while dealing with uncontrollable weather and unpredictable markets that impact farm profitability,” noted MFBF National Affairs Director Nicole Rolf. “Tax provisions that accelerate expensing also help farmers and ranchers better manage cash flow, minimize tax liabilities and reduce borrowing needs.”
The fact that Congress will be in session for only 11 days in December is making farmers and ranchers especially anxious.
“There are a lot of important matters left to be attended to in D.C. before the end of the year. Farmers and ranchers in Montana are worried that if Congress gets wrapped up in other matters, they won’t get around to addressing these much-needed tax provision extenders,” Rolf said. “We are calling on Congress to act quickly to renew and make these important provisions permanent.”
Big Horn County Farm Bureau secretary and tax preparer Gina Stevens said immediate action by Congress to pass these tax extenders is essential. “It’s very difficult for farmers and ranchers to make planning decisions at the last minute,” Stevens cautioned. “Even if these tax extender bills are passed just before Christmas recess, that leaves only five days to make a deal and take possession on what you purchased so you can make the deduction. Remember, you can’t deduct retroactively. The purchases you make for your farm and ranch equipment must be completed by December 31 to qualify for the 2015 tax year.”
Source: Montana Farm Bureau Federation