Means Testing is Good Politics, But Economic Sense? 1

Size: px
Start display at page:

Download "Means Testing is Good Politics, But Economic Sense? 1"

Transcription

1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial and no warranty is given or implied by the author or any other party. Each farmer must consider whether such marketing strategies are appropriate for his or her situation. This web page does not represent the views of Kansas State University. Means Testing is Good Politics, But Economic Sense? 1 One would doubt that many in Congress really understand the administrative cost for a means test that will likely exceed any savings. The real definition of a big farm is anyone who farms an acre more than I farm. However, Congress continually tries to define a big farm based on payment limits and Adjusted Gross Income (AGI), because it makes good politics. Unlike commodity programs where subsidy checks are sent to farmers, crop insurance only provides a subsidy payment in cash if there is a claim. Otherwise, crop insurance is a production expense and farmers are the ones writing checks. If the proposed means test of a $750,000 ($750K) AGI limit is applied to crop insurance, it will require farmers over the limit to pay a 15 point increase in their share of the crop insurance premium. Most Washington observers expect any means testing for crop insurance will be determined by the Farm Service Agency (FSA) because FSA already has means testing for their programs. One would think the AGI limit would be a simple administrative process. But one only needs to read the 430 pages of FSA handbook on AGI limits, titled Payment Eligibility, Payment Limitation, and Average Adjusted Gross Income to figure out this is more complicated than expected. The good news is that the AGI is effectively net farm income, so the expenses are deducted. If this were gross income, a large number of farmers would be over the limit. Many crop insurance agents are likely to have a few 1 Prepared by G. A. (Art) Barnaby, Jr., Professor, Department of Agricultural Economics, K-State Research and Extension, Kansas State University, Manhattan, KS 66506, June 10, 2013, Phone ,

2 farmers that cannot meet the $750K AGI limit and if they drop their coverage, that will impact agencies and their employees. Those big-farm-generated commissions help offset the cost of the paper work, marketing, underwriting, etc., for the small farms that have placed their insurance with the same private agent. It appears some policymakers are starting to understand that only a few farmers would be over the $750K limit, but they account for a very large share of the production. If these big farms drop out of the insurance pool, it would increase rates on the remaining farmers, if these large farmers are producing underwriting gains. The administration is making the opposite argument on the health insurance pool, where they want everyone in the insurance pool to make rates affordable. The Senate Bill would require the Congressional Budget Office (CBO) to conduct a study and report to the Secretary if the AGI limit will increase rates for small farmers or impact the delivery of crop insurance. Many observers expect the analysis will assume everyone is rated correctly and if the big farms are generating gains, it is only because they have not been hit with a weather disaster yet. It will affect an agent because if a large customer drops their coverage or changes to CAT, the income will decline more than the reduction in their expenses. By contrast, the loss of a small farmer will likely reduce cost more than it reduces commission income for an agent, so it will take some interesting assumptions for CBO to report the AGI has no impact crop insurance delivery. The first question: is the $750K AGI limit for crop insurance applied only to farm income or does it include non-farm income? For example, in the FSA Handbook, FSA provides the line number on the tax return that applies to the AGI limit (Table 1). If it is a 1040 return, the AGI would include non-farm income, but that would not be the case on an 1120 return for a farming corporation. As one digs through the FSA handbook on means testing for their programs, one finds it is even difficult to define farm income. If it is only farm income, then what is included in farm income? FSA includes sale of farm equipment, production inputs and services to farmers and ranchers as farm income. For example, if a farmer has a side business providing aerial spraying, that income would be counted as farm income under current FSA rules. Agriculture has had some very good years and as result, there may be some farmers over the $750K limit based on the prior 3 good income years, but suppose the USA enters a year(s) with low farm prices? Farmers will have to pay the higher farmer-paid premiums in their low income years, because they were over the limit in the prior high income years. For 2013, FSA uses years 2011, 2010, and 2009 to calculate the average AGI, because farmers may not have filed their 2012 returns at the start of the crop year. As a result, these farmers would have at least a two-year lag before the lower income average would remove the 15-point farmer-paid premium penalty for crop insurance under the Senate Bill. 2

3 Effective AGI Limit Varies by State. In non-community property states like Kansas, a married couple filing a joint return requires a CPA or lawyer to certify what each person s income would have been if they had filed a separate return, assuming the AGI line on their tax return is over $750K. So if they had filled separate returns and wife and husband don t show equal returns, then they will hit the limit with less than $1.5 million of AGI. For example, assume the adjusted gross is $1 million and separate returns shows the husband s AGI at $249K and wife s AGI at $751K, then they hit the limit at $1 million, rather than $1.5 million. However, in this example, if the wife s AGI exceeds the limit and the husband AGI is under $750K he would still be able to collect benefits base on his share of the farm income, but his wife could not collect benefits. Farmers with joint returns over the $750K limit must request FSA make the income split and provide the analysis from a CPA or lawyer. The Kansas FSA accepts the amounts provided by a CPA or Lawyer, if a joint return is split because the farmer is over $750K AGI without any additional analysis. In a community property state, FSA splints the return 50-50, so a couple filing jointly would effectively have a limit of $1.5 million. As result, the effective limit for means testing varies by state based on community property rules. Under a partnership, if one of the partners is over AGI limit in the FSA program, they will split each producer s share and those under the AGI limit will receive FSA benefits. But how would that work under crop insurance? The partnership pays a premium that would have to be split based on share and the number of partners over the limit. This means part of the partnership s premium would be paid at the current rate and part of the premium would require the partnership to pay a 15 point increase in the farmer s share of the premium. Tax experts are reporting that farmers can use 179 expense and other accelerated depreciation methods that would keep the AGI below $750K, and reduce the number of farmers that would be over the limit. For 2013, the 179 limit is $500,000 that has limit on capital purchases equal to $2 million. The 2013 bonus depreciation is equal to 50%. Section 179 deduction is available for most new and used capital equipment, and also includes certain software. Bonus depreciation can be taken on new equipment only (no used equipment, no software). When applying these provisions, Section 179 is generally taken first, followed by bonus depreciation, unless the business has no taxable profit in the given tax year. Farmers might also build grain storage, especially temporary storage and use tax depreciation methods to reduce their AGI. The storage would then allow farmers move sales across tax years to keep their AGI below the limit. One should be aware that the tax code is continuously changing and may increase or decrease the available tax tools to limit the reported AGI. However, as a general statement, farmers have been able to manage their AGI as a method to limit their income tax payments. 3

4 Likely USDA will need to audit farmers to make sure they are not over the AGI limit for crop insurance. If a farmer is audited, there will likely be a delay so the audit maybe for a prior year or perhaps several prior years. So If USDA determines after the fact that a farmer was over the $750K AGI limit and should have paid the additional 15 point of premium, will the Approved Insurance Provider (AIP) be responsible for recovering the under-paid premium from a prior year(s)? What if that year was also a claim year? Because she was over the AGI limit and did not pay the insurance premium penalty was she not eligible for crop insurance, and the claim check is now fraudulent. So is the farmer required to refund the entire claim paid or just pay the additional premium for the prior year(s) that should have been charged? Under FSA rules, if a farmer signs up for a 15-year Conservation Reserve Program (CRP) contract and is under the AGI limit at the start of the contract, then she will continue to be paid even if she is over the AGI limit in later years. Crop insurance is a continuous contract. If no one cancels the crop insurance contract, it rolls the policy over into a new contract. Therefore, since it too is a continuous contract, the question would be raised, if the farmer is under the AGI limit when he initiates the contract, will the crop insurance contract still roll over based on the same terms, even if he is over the AGI limit in later years? Unlike payment limits, the AGI is a hard limit with few if any ways to avoid the limit. The use of section 179 expense is one of those methods to limit AGI, but tax codes change. If the AGI limit were lowered to $250K, it would create a lot of administrative costs because it would catch a much larger number of farmers. USDA would need to hire more employees to handle the paper work if a $250K AGI limit were adopted as some in Congress have advocated. This analysis assumes the definition for AGI will be the same for crop insurance as it is for FSA. If for some reason the income limit were defined as gross income, then there would be a large number of farmers over a $750,000 gross income limit. 4

5 Table 1. FSA Tax Form Line Numbers for AGI Participation Limits. 5

How Large is the 2012 Crop Insurance Underwriting Loss? 1

How Large is the 2012 Crop Insurance Underwriting Loss? 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Will ARC Allow Farmers to Cancel Their 2014 Crop Insurance (Updated)? 1

Will ARC Allow Farmers to Cancel Their 2014 Crop Insurance (Updated)? 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Proposed means testing for eligibility to purchase crop insurance 1

Proposed means testing for eligibility to purchase crop insurance 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisis. The risk of loss in trading futures, optis, forward ctracts, and hedge-to-arrive can be substantial

More information

Lower Rates Mean Lower Crop Insurance Cost 1

Lower Rates Mean Lower Crop Insurance Cost 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

What Percent Level and Type of Crop Insurance Should Winter Wheat Growers Select? 1

What Percent Level and Type of Crop Insurance Should Winter Wheat Growers Select? 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1

CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented at the 1997 Missouri Commercial Agriculture Crop Institute CROP REVENUE COVERAGE INSURANCE PROVIDES ADDITIONAL RISK MANAGEMENT WHEAT ALTERNATIVES 1 Presented by: Art Barnaby Managing Risk With

More information

Buy the More Expensive Revenue Protection and Sell off Part of the Coverage 1

Buy the More Expensive Revenue Protection and Sell off Part of the Coverage 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Yield Protection Crop Insurance will have the same Yield Coverage as Revenue Protection, but RP is Expected to be the Preferred Choice (Updated) 1

Yield Protection Crop Insurance will have the same Yield Coverage as Revenue Protection, but RP is Expected to be the Preferred Choice (Updated) 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Group Risk Income Protection Plan added in Kansas for 2006 Wheat (Updated) 1

Group Risk Income Protection Plan added in Kansas for 2006 Wheat (Updated) 1 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Group Risk Income Protection Plan and Group Risk Plans added in New Kansas Counties for 2005 1 Updated 3/12/05

Group Risk Income Protection Plan and Group Risk Plans added in New Kansas Counties for 2005 1 Updated 3/12/05 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Understanding the Standard Reinsurance Agreement, Explains Crop Insurance Companies Losses 1,2

Understanding the Standard Reinsurance Agreement, Explains Crop Insurance Companies Losses 1,2 Disclaimer: This web page is designed to aid farmers with their marketing and risk management decisions. The risk of loss in trading futures, options, forward contracts, and hedge-to-arrive can be substantial

More information

Title I Programs of the 2014 Farm Bill

Title I Programs of the 2014 Farm Bill Frequently Asked Questions: Title I Programs of the 2014 Farm Bill November 2014 Robin Reid G.A. Art Barnaby Mykel Taylor Extension Associate Extension Specialist Assistant Professor Kansas State University

More information

GAO CROP INSURANCE. Savings Would Result from Program Changes and Greater Use of Data Mining

GAO CROP INSURANCE. Savings Would Result from Program Changes and Greater Use of Data Mining GAO March 2012 United States Government Accountability Office Report to the Ranking Member, Permanent Subcommittee on Investigations, Committee on Homeland Security and Governmental Affairs, U.S. Senate

More information

CROP INSURANCE. Reducing Subsidies for Highest Income Participants Could Save Federal Dollars with Minimal Effect on the Program

CROP INSURANCE. Reducing Subsidies for Highest Income Participants Could Save Federal Dollars with Minimal Effect on the Program United States Government Accountability Office Report to Congressional Requesters March 2015 CROP INSURANCE Reducing Subsidies for Highest Income Participants Could Save Federal Dollars with Minimal Effect

More information

Ohio State University Extension, 2120 Fyffe Road, Columbus, OH 43210

Ohio State University Extension, 2120 Fyffe Road, Columbus, OH 43210 FACT SHEET Ohio State University Extension, 2120 Fyffe Road, Columbus, OH 43210 Shale Oil and Gas Development Fact Sheet Series Income Tax Management of Oil and Gas Lease Payments Introduction Chris Zoller

More information

Dairy Margin Protection Program of the 2014 Farm Bill

Dairy Margin Protection Program of the 2014 Farm Bill : Dairy Margin Protection Program of the 2014 Farm Bill July 2015 Robin Reid Dr. Gregg Hadley Extension Associate Associate Professor Kansas State University Kansas State University 785-532-0964 785-532-5838

More information

The Farm Bill Down in the Weeds Numbers

The Farm Bill Down in the Weeds Numbers Disclaimer The Farm Bill Down in the Weeds Numbers by Dr. G. Art Barnaby, Jr. Professor, Agricultural Economics. Kansas State University KSU Presentation Spring, 2014 Email: barnaby@ksu.edu Phone 78531515

More information

Farmer Savings Accounts

Farmer Savings Accounts Farmer Savings Accounts Mark A. Edelman, Iowa State University James D. Monke, Economic Research Service, USDA Ron Durst, Economic Research Service, USDA Introduction Various incentives can be used to

More information

The Affordable care act (ACA) Brian Newhouse, cpa Newhouse & Associates, PLLC

The Affordable care act (ACA) Brian Newhouse, cpa Newhouse & Associates, PLLC The Affordable care act (ACA) Brian Newhouse, cpa Newhouse & Associates, PLLC Overview Jack and Diane Agribusiness, Inc. Ralph Brian overview Individual Mandate Medicare Tax Surcharges Large Employer Coverage

More information

We have seen in the How

We have seen in the How : Examples Using Hedging, Forward Contracting, Crop Insurance, and Revenue Insurance To what extent can hedging, forward contracting, and crop and revenue insurance reduce uncertainty within the year (intrayear)

More information

TAX MANAGEMENT TIPS FOR FARMERS L.R. Borton Michigan State University. 2015 - Tax Planning

TAX MANAGEMENT TIPS FOR FARMERS L.R. Borton Michigan State University. 2015 - Tax Planning TAX MANAGEMENT TIPS FOR FARMERS L.R. Borton Michigan State University 2015 - Tax Planning 1. The basic management guideline is to avoid wide fluctuations in taxable income because a relatively uniform

More information

TAX SAVINGS IN THE STIMULUS BILL

TAX SAVINGS IN THE STIMULUS BILL By Jason Tang and Michael Burzynski, CPA The American Recovery and Reinvestment Act of 2009 was signed into law on February 17, 2009 in an effort to stimulate economic development. This bill is one of

More information

U.S. Farm Policy: Overview and Farm Bill Update. Jason Hafemeister 12 June 2014. Office of the Chief Economist. Trade Bureau

U.S. Farm Policy: Overview and Farm Bill Update. Jason Hafemeister 12 June 2014. Office of the Chief Economist. Trade Bureau U.S. Farm Policy: Office of the Chief Economist Trade Bureau Overview and Farm Bill Update Jason Hafemeister 12 June 2014 Agenda Background on U.S. Agriculture area, output, inputs, income Key Elements

More information

Roth IRA. Answers. To Your. Questions

Roth IRA. Answers. To Your. Questions Roth IRA Answers To Your Questions A wealth of information to plan your future The Roth IRA offers unique and exciting savings opportunities. Not only can it help with retirement needs, but also a first-time

More information

On behalf of our team at GJC, Happy Holidays and Cheers to a New Start in the New Year! Dear Clients and Friends,

On behalf of our team at GJC, Happy Holidays and Cheers to a New Start in the New Year! Dear Clients and Friends, Return to GJC Homepage Dear Clients and Friends, Perhaps the one issue on which there is agreement in Washington is the need for comprehensive tax reform. However, getting started on this task is put off

More information

Healthcare Provisions 2013/2014. What Small Businesses Need to Know

Healthcare Provisions 2013/2014. What Small Businesses Need to Know Healthcare Provisions 2013/2014 What Small Businesses Need to Know Healthcare Provisions 2013/2014 PPACA The healthcare reforms in the Patient Protection and Affordable Care Act (PPACA), commonly referred

More information

Implications of Crop Insurance as Social Policy

Implications of Crop Insurance as Social Policy Implications of Crop Insurance as Social Policy Bruce Babcock Iowa State University Presented at the Minnesota Crop Insurance Conference Sept 10, 2014 Mankato, MN Summary of talk 2014 farm bill irrevocably

More information

RATE SINGLE MARRIED (JOINT) HEAD OF HOUSEHOLD

RATE SINGLE MARRIED (JOINT) HEAD OF HOUSEHOLD December 2015 Dear Client: The purpose of tax planning is summed up in the following quote, You must pay taxes. But there s no law that says you gotta leave a tip. As 2015 draws to a close, there is still

More information

business owner issues and depreciation deductions

business owner issues and depreciation deductions business owner issues and depreciation deductions Individuals who are owners of a business, whether as sole proprietors or through a partnership, limited liability company or S corporation, have specific

More information

2010 Risk and Profit Conference Breakout Session Presenters. 9. Marketing Grain Using a Storage Hedge

2010 Risk and Profit Conference Breakout Session Presenters. 9. Marketing Grain Using a Storage Hedge Orlen Grunewald 2010 Risk and Profit Conference Breakout Session Presenters 9. Marketing Grain Using a Storage Hedge Orlen Grunewald is a professor in the Department of Agricultural

More information

THE GRADUATED PERSONAL INCOME TAX ASSESSMENT: FREQUENTLY ASKED QUESTIONS

THE GRADUATED PERSONAL INCOME TAX ASSESSMENT: FREQUENTLY ASKED QUESTIONS LEGISLATIVE REVENUE OFFICE State Capitol Building 900 Court St. NE, Room H-197 Salem, Oregon 97301 Research Brief (503) 986-1266 FAX (503) 986-1770 http://www.leg.state.or.us/comm/lro/home.htm Number 3-03

More information

Comparing LRP to a Put Option

Comparing LRP to a Put Option Comparing LRP to a Put Option Dr. G. A. Art Barnaby, Jr Kansas State University Phone: (785) 532-1515 Email: abarnaby@agecon.ksu.edu Check out our WEB at: AgManager.info 1 Livestock Risk Protection (LRP)

More information

Common Crop Insurance Policy (CCIP) DR. G. A. ART BARNABY, JR. Kansas State University 4B Agricultural Consultants

Common Crop Insurance Policy (CCIP) DR. G. A. ART BARNABY, JR. Kansas State University 4B Agricultural Consultants Common Crop Insurance Policy (CCIP) DR. G. A. ART BARNABY, JR. Kansas State University 4B Agricultural Consultants Phone: 785-532-1515 EMAIL: barnaby@ksu.edu Check out our WEB page at http://www.agmanager.info

More information

Self-Employment Tax. Gary Hoff, Extension Specialist- Taxation University of Illinois Tax School

Self-Employment Tax. Gary Hoff, Extension Specialist- Taxation University of Illinois Tax School August 2010 RTE/2010-07 Self-Employment Tax Gary Hoff, Extension Specialist- Taxation University of Illinois Tax School Introduction Most taxpayers working for an employer have FICA and Medicare withheld

More information

Proposals to Reduce Premium Subsidies for Federal Crop Insurance

Proposals to Reduce Premium Subsidies for Federal Crop Insurance Proposals to Reduce Premium Subsidies for Federal Crop Insurance Dennis A. Shields Specialist in Agricultural Policy March 20, 2015 Congressional Research Service 7-5700 www.crs.gov R43951 Summary Many

More information

Crop Insurance as a Tool

Crop Insurance as a Tool Crop Insurance as a Tool By: Chris Bastian University of Wyoming There are several approaches to address income variability associated with production risk. One approach is to produce more than one product

More information

Administrative Policy Reminders. Changing Bank Accounts. Civil Rights/Discrimination Complaint Process. Nondiscrimination Statement

Administrative Policy Reminders. Changing Bank Accounts. Civil Rights/Discrimination Complaint Process. Nondiscrimination Statement Farm Service Agency Annual Policy Reminders Farm Service Agency works hard to get information to you in a timely manner regarding our programs and policies. This document provides a list of important FSA

More information

Agricultural Tax Issues Update 2015. Farm Business Management Northland Community & Technical College By: Greg Dvergsten & Greg Kalinoski

Agricultural Tax Issues Update 2015. Farm Business Management Northland Community & Technical College By: Greg Dvergsten & Greg Kalinoski Agricultural Tax Issues Update 2015 Farm Business Management Northland Community & Technical College By: Greg Dvergsten & Greg Kalinoski Standard Deduction & Exemptions Standard Deduction Single $6,300

More information

Multiple Peril Crop Insurance

Multiple Peril Crop Insurance Multiple Peril Crop Insurance Multiple Peril Crop Insurance (MPCI) is a broadbased crop insurance program regulated by the U.S. Department of Agriculture and subsidized by the Federal Crop Insurance Corporation

More information

Post Election Focus: Stars, Stripes & Taxes

Post Election Focus: Stars, Stripes & Taxes Post Election Focus: Stars, Stripes & Taxes Presented By: Margo Cook, CPA December 6, 2012 Click HERE to listen to webinar. Post Election Focus: Stars, Stripes & Taxes Presented By: Margo Cook, CPA December

More information

Tax Subsidies for Health Insurance An Issue Brief

Tax Subsidies for Health Insurance An Issue Brief Tax Subsidies for Health Insurance An Issue Brief Prepared by the Kaiser Family Foundation July 2008 Tax Subsidies for Health Insurance Most workers pay both federal and state taxes for wages paid to them

More information

FSA loan agent reviews financing options for farmers Friday, 09 January 2015 09:45

FSA loan agent reviews financing options for farmers Friday, 09 January 2015 09:45 Stevens County Farm Service Agency loan agent Will Schnittker talks about some of the various programs available for ag producers to finance expenses Wednesday morning at a Farm Bill meeting hosted by

More information

AGRI-BUSINESS DECISIONS:

AGRI-BUSINESS DECISIONS: AGRI-BUSINESS DECISIONS: November 2014 STRATEGIC CONSIDERATIONS OF SUCCESSION PLANNING Succession planning and estate planning require careful consideration of the goals and objectives of those individuals

More information

this section shall not count toward pay limits under the 2014 Farm Bill limits. (Section 1119)

this section shall not count toward pay limits under the 2014 Farm Bill limits. (Section 1119) Title I Commodities (1) Repeal of Direct Payments Section 1101 of the House bill repeals direct payments effective with the 2014 crop year. The section continues direct payments for the 2013 crop year

More information

Cost & Efficiency Analysis of U.S. Crop Insurance Program: Implications of Additional FSA Responsibilities

Cost & Efficiency Analysis of U.S. Crop Insurance Program: Implications of Additional FSA Responsibilities Cost & Efficiency Analysis of U.S. Crop Insurance Program: Implications of Additional FSA Responsibilities Executive Summary Prepared for: Informa Economics Phone: 901.766.4669 www.informaecon.com September

More information

This article illustrated deferred tax liabilities for a cash crop farm in west central Indiana. The

This article illustrated deferred tax liabilities for a cash crop farm in west central Indiana. The September 2014 Computation of Deferred Liabilities Michael Langemeier, Associate Director, Center for Commercial Agriculture This article is one of a series of financial management articles that will examine

More information

Communicating the Positive Messages of Crop Insurance

Communicating the Positive Messages of Crop Insurance Who is NCIS? Communicating the Positive Messages of Crop Insurance Trade Association Provide support and service to crop insurance companies for both Federal and private crop insurance All AIPs are members

More information

SPECIAL ISSUES IN ESTATE PLANNING FOR PERSONS WHO OWN AGRICULTURAL LAND OR CONDUCT FARMING OPERATIONS. By Robert Serio

SPECIAL ISSUES IN ESTATE PLANNING FOR PERSONS WHO OWN AGRICULTURAL LAND OR CONDUCT FARMING OPERATIONS. By Robert Serio SPECIAL ISSUES IN ESTATE PLANNING FOR PERSONS WHO OWN AGRICULTURAL LAND OR CONDUCT FARMING OPERATIONS By Robert Serio SPECIAL ISSUES IN ESTATE PLANNING FOR PERSONS WHO OWN AGRICULTURAL LAND OR CONDUCT

More information

Farm Service Agency American Recovery and Reinvestment Act

Farm Service Agency American Recovery and Reinvestment Act Farm Service Agency American Recovery and Reinvestment Act Agricultural Disaster Assistance Transition (2008 Transition Assistance) Objectives American Recovery and Reinvestment Act Funding Table 2008

More information

What You Need to Know About Roth IRA Conversions in 2010

What You Need to Know About Roth IRA Conversions in 2010 What You Need to Know About Roth IRA Conversions in 2010 Your Guide to THE 2010 IRA Tax Law Changes From the editors at SmartMoney Custom Solutions Dear Reader, The year 2010 offers you an unprecedented

More information

Explaining the Costs

Explaining the Costs TODAYcrop insurance Explaining the Costs of the Crop Insurance Program By Keith Collins and Frank Schnapp, NCIS This article examines the information typically presented to the public on the costs of the

More information

2010 FOCUS ON BUSINESS

2010 FOCUS ON BUSINESS 2010 FOCUS ON BUSINESS December 1, 2010 FEDERAL TAX UPDATE 2010 SMALL BUSINESS JOBS ACT & MISCELLANEOUS TAX PROVISIONS PRESENTED BY: DAVID P. VENISKEY, CPA TAX PARTNER EFP ROTENBERG, LLP TAX RATES Income

More information

THE 2014 FARM BILL: Overview & Decision Tool

THE 2014 FARM BILL: Overview & Decision Tool THE 2014 FARM BILL: Overview & Decision Tool Rod M. Rejesus Associate Professor and Extension Specialist Dept. of Ag. and Resource Economics NC State University What Do We Know? There is a Farm Bill and

More information

1. Tax treatment of health insurance premiums 2. Pooling and a public plan

1. Tax treatment of health insurance premiums 2. Pooling and a public plan 1. Tax treatment of health insurance premiums 2. Pooling and a public plan Bryan Dowd, Ph.D. Division of Health Policy and Management School of Public Health University of Minnesota June 17, 2009 Tax Exemption

More information

Annuity Owner Mistakes Tips and Ideas That Could Save You Thousands

Annuity Owner Mistakes Tips and Ideas That Could Save You Thousands Annuity Owner Mistakes Tips and Ideas That Could Save You Thousands Provided to you by: Eric J Malloy CRPC Annuity Owner Mistakes Written by Financial Educators Provided to you by Eric J Malloy CRPC 2

More information

THE 2014 FARM BILL: Overview & Major Highlights

THE 2014 FARM BILL: Overview & Major Highlights THE 2014 FARM BILL: Overview & Major Highlights Rod M. Rejesus Associate Professor and Extension Specialist Dept. of Ag. and Resource Economics NC State University What Do We Know? There is a Farm Bill

More information

The Impact of Proposed Federal Tax Reform on Farm Businesses

The Impact of Proposed Federal Tax Reform on Farm Businesses The Impact of Proposed Federal Tax Reform on Farm Businesses James M. Williamson and Ron Durst United States Department of Agriculture Economic Research Service Washington, DC Poster prepared for presentation

More information

Health Care Reform Legislation and You

Health Care Reform Legislation and You Health Care Reform Legislation and You Timelines and Implications of the New Law for Individuals Updated as of May 2011 Health Care Reform Legislation and You The Patient Protection and Affordable Care

More information

2014 Tax Newsletter HIGHLIGHTS. Potential Tax Reform. 2014 Income Tax Rates. 2014 Tax Extenders. Repair Regulations. Affordable Care Act

2014 Tax Newsletter HIGHLIGHTS. Potential Tax Reform. 2014 Income Tax Rates. 2014 Tax Extenders. Repair Regulations. Affordable Care Act 5700 Crooks Rd., Ste. 201 Troy, MI 48098 Phone: 248.649.1600 2014 Tax Newsletter Dear Client: 1785 W. Stadium Blvd., Ste. 101 Ann Arbor, MI 48103 Phone: 734.665.6688 www.smcpafirm.com Although 2014 was

More information

INDIVIDUAL TAX STRATEGIES

INDIVIDUAL TAX STRATEGIES BY SCOTT HENSLEY SHENSLEY@STANCILCPA.COM DECEMBER 4, 2014 STANCIL & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 4909 WINDY HILL DRIVE RALEIGH, NC 27609 919-872-1260 TOPICS TO BE COVERED TODAY WHAT IS TAX PLANNING

More information

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE The managers on the part of the House and the Senate at the conference on the disagreeing votes of the two Houses on the amendment of the House

More information

Unit12. Special Tax Computation Methods, Tax Credits, and Payment of Tax [Pak Ch. 14]

Unit12. Special Tax Computation Methods, Tax Credits, and Payment of Tax [Pak Ch. 14] 1 Unit12. Special Tax Computation Methods, Tax Credits, and Payment of Tax [Pak Ch. 14] This chapter covers several topics: the Alternative Minimum Tax, Tax Credits, and Tax Payments. Outline 2 1. Alternative

More information

United States General Accounting Office. Testimony Before the Committee on Finance, United States Senate

United States General Accounting Office. Testimony Before the Committee on Finance, United States Senate GAO United States General Accounting Office Testimony Before the Committee on Finance, United States Senate For Release on Delivery Expected at 10:00 a.m. EST on Thursday March 8, 2001 ALTERNATIVE MINIMUM

More information

Tax Update. Rod Mauszycki, CliftonLarsonAllen

Tax Update. Rod Mauszycki, CliftonLarsonAllen Tax Update Rod Mauszycki, CliftonLarsonAllen Government s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subside

More information

CHOOSING AMONG CROP INSURANCE PRODUCTS

CHOOSING AMONG CROP INSURANCE PRODUCTS CHOOSING AMONG CROP INSURANCE PRODUCTS Gary Schnitkey Department of Agricultural and Consumer Economics University of Illinois at Urbana-Champaign Email: schnitke@uiuc.edu, Phone: (217) 244-9595 August

More information

Healthcare is a major expense for many people, and its. Out-of-Pocket Healthcare: Turning Everyday Expenses into Tax Savings

Healthcare is a major expense for many people, and its. Out-of-Pocket Healthcare: Turning Everyday Expenses into Tax Savings CHAPTER SEVEN Out-of-Pocket Healthcare: Turning Everyday Expenses into Tax Savings By Diane K. Gardner, EA, CTC Healthcare is a major expense for many people, and its costs continue to rise even among

More information

ENACTED LEGISLATION 10/24/2013. Updated references to January 1, 2013

ENACTED LEGISLATION 10/24/2013. Updated references to January 1, 2013 Jim McNulty ENACTED LEGISLATION Internal Revenue Code (IRC) Update Bill (SF106) Updated references to January 1, 2013 Includes changes to American Taxpayer Relief Act of 2012 Coupled with all items except

More information

HEALTH INSURANCE TAXATION ISSUES POST-DIVORCE

HEALTH INSURANCE TAXATION ISSUES POST-DIVORCE HEALTH INSURANCE TAXATION ISSUES POST-DIVORCE by: Chris Chen, CFP, CDFA Justin L. Kelsey, Esq. Insight Financial Strategists, LLC Kelsey & Trask, P.C. http://insightfinancialstrategists.com http://www.kelseytrask.com

More information

Leasing vs. Buying Farm Machinery

Leasing vs. Buying Farm Machinery Leasing vs. Buying Farm Machinery Department of Agricultural Economics MF-2953 www.agmanager.info Machinery and equipment expense typically represents a major cost in agricultural production. Purchasing

More information

The Child Tax Credit: Problems with the Refundable Portion

The Child Tax Credit: Problems with the Refundable Portion The Child Tax Credit: Problems with the Refundable Portion * Katherine D. Black and **Sheldon R. Smith Utah Valley State College This article discusses the current tax code with respect to the child tax

More information

From Catastrophic to Shallow Loss Coverage: An Economist's Perspective of U.S. Crop Insurance Program and Implications for Developing Countries

From Catastrophic to Shallow Loss Coverage: An Economist's Perspective of U.S. Crop Insurance Program and Implications for Developing Countries From Catastrophic to Shallow Loss Coverage: An Economist's Perspective of U.S. Crop Insurance Program and Implications for Developing Countries Robert Dismukes Agricultural Economist Insurance coverage:

More information

AFBF Comparison of Senate and House Committee passed Farm Bills May 16, 2013

AFBF Comparison of Senate and House Committee passed Farm Bills May 16, 2013 CURRENT LAW SENATE AG COMMITTEE (S. 954) HOUSE AG COMMITTEE (HR 1947) Reported out of Committee 15 5 Reported out of Committee 36 10 Cost $979.7 billion over the 10 years before sequester reductions of

More information

Certain Government Payments

Certain Government Payments Attention: Copy A of this form is provided for informational purposes only. Copy A appears in red, similar to the official IRS form. The official printed version of Copy A of this IRS form is scannable,

More information

Tax Items For Businesses Ohio Tax Law Changes

Tax Items For Businesses Ohio Tax Law Changes FRUSH & ASSOCIATES, INC. OVERVIEW Recap of 2013 ACA Act NII Surtax Medicare Wage Surtax Tax Items For Businesses Ohio Tax Law Changes Circular 230 Disclosure Pursuant to the rules of professional conduct

More information

Health Insurance Reform Outlook

Health Insurance Reform Outlook Health Insurance Reform Outlook August 2009 by Janet Trautwein CEO, National Association of Health Underwriters Introduction Legislating health care reform in 2009 is the major priority of the Obama administration

More information

How the New Health Care Law Benefits You

How the New Health Care Law Benefits You How the New Health Care Law Benefits You Congress enacted a new health care law which brings a number of benefits to all Americans, including people over 50. Some of these changes you will see this year.

More information

Beginning Farm/Ranch. Other Things. Social Security Benefits. Retirement Planning for Beginning Farmers & Ranchers. Typical American Retirement Income

Beginning Farm/Ranch. Other Things. Social Security Benefits. Retirement Planning for Beginning Farmers & Ranchers. Typical American Retirement Income Retirement Planning for Beginning Farmers & Ranchers Joel Schumacher Associate Specialist Beginning Farm/Ranch Priorities Finding your spot in a family operation Acquiring Land & Equipment Acquiring Livestock

More information

Transcript for Canceled Debt (Tax Consequences)

Transcript for Canceled Debt (Tax Consequences) Transcript for Canceled Debt (Tax Consequences) Hello. I m Jean Wetzler, with a reenactment of a March 2009 IRS National Phone Forum on the Tax Consequences of Canceled Debt. The presenter for the phone

More information

To: Board of Directors September 17, 2001 Federal Crop Insurance Corporation

To: Board of Directors September 17, 2001 Federal Crop Insurance Corporation United States Department of Agriculture Federal Crop Insurance Corporation 1400 Independence Ave, SW Stop 0801 Washington, DC 20250-0801 To: Board of Directors September 17, 2001 Federal Crop Insurance

More information

Client Tax Letter. Reducing Uncertainty, Increasing. Complexity. What s Inside. April/May/June 2013

Client Tax Letter. Reducing Uncertainty, Increasing. Complexity. What s Inside. April/May/June 2013 Client Tax Letter Tax Saving and Planning Strategies from your Trusted Business Advisor sm Reducing Uncertainty, Increasing Complexity Each April, most Americans file their income tax returns for the previous

More information

IMPACT. Taxpayer implications of an Economic Downturn TAX IMPLICATIONS

IMPACT. Taxpayer implications of an Economic Downturn TAX IMPLICATIONS TAX IMPLICATIONS IMPACT Taxpayer implications of an Economic Downturn By Joseph LiPari, CPA, M.B.A. As the United States continues to be mired in its worst recession in 80 years, we are all well aware

More information

IRAs. AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com

IRAs. AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com AKD Consultants Adam Dworkin CPA 188 Whiting Street Suite 10 Hingham, MA 02043 781-556-5554 Adam@AKDConsultants.com IRAs October 01, 2013 Page 1 of 8, see disclaimer on final page Both traditional and

More information

Health Care Reform Legislation and You

Health Care Reform Legislation and You (Customizable space for CPA Firm Logo to go here) Health Care Reform Legislation and You Timelines and Implications of the New Law for Individuals Updated as of January 2011 The Health Care Reform Legislation

More information

Annuity Owner Mistakes

Annuity Owner Mistakes Annuity Owner Mistakes Tips and Ideas That Could Save You Thousands Provided to you by: William E. Watson III, RFC Registered Financial Consultant Annuity Owner Mistakes Written by Javelin Marketing, Inc.

More information

Here is a quick summary of most-important tax changes starting with those that affect individuals. Payroll Tax Holiday Is Dead (So Far)

Here is a quick summary of most-important tax changes starting with those that affect individuals. Payroll Tax Holiday Is Dead (So Far) Dear Clients: The American Taxpayer Relief Act of 2012 (better known as the fiscal cliff legislation) became law on 1/2/13. Due to the expiration of the so-called payroll tax holiday, all workers will

More information

Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR

Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR Agricultural Outlook Forum For Release: Monday, February 23, 1998 AGRICULTURAL RISK MANAGEMENT AND THE ROLE OF THE PRIVATE SECTOR Joseph W. Glauber Deputy Chief Economist U.S. Department of Agriculture

More information

2. To determine APH yields, can crop insurance history be used? The last program (2002) required actual scale tickets from the grain elevator.

2. To determine APH yields, can crop insurance history be used? The last program (2002) required actual scale tickets from the grain elevator. Questions and answers from Session 2 Managing Margin Risk 1. Could you elaborate more on the up to 150% of a county yield option on GRP and GRIP plans? What are the advantages and additional costs associated

More information

Tax Incentives For Farm Businesses

Tax Incentives For Farm Businesses Tax Incentives For Farm Businesses Parman R. Green UM Extension Ag Business Mgmt. Specialist 111 N. Mason Carrollton, MO 64633 (660) 542-1792 greenp@missouri.edu http://agebb.missouri.edu/agtax/index.htm

More information

REVISED COBRA MODEL NOTICES ISSUED REFLECTING SUBSIDY EXTENSION

REVISED COBRA MODEL NOTICES ISSUED REFLECTING SUBSIDY EXTENSION COMPLIANCE ALERT January 15, 2010 REVISED COBRA MODEL NOTICES ISSUED REFLECTING SUBSIDY EXTENSION The Department of Labor (DOL) issued updated model notices to reflect the COBRA subsidy extension included

More information

RETIREMENT AHA MOMENTS

RETIREMENT AHA MOMENTS RETIREMENT AHA MOMENTS RETIREMENT AHA MOMENTS 2 Retirement Aha Moments Be In The Know On Key Dates and Decisions When you or your spouse celebrate the birthdays shown below, be sure to check on the key

More information

Cash Versus Accrual Accounting: Tax Policy Considerations

Cash Versus Accrual Accounting: Tax Policy Considerations Cash Versus Accrual Accounting: Tax Policy Considerations Raj Gnanarajah Analyst in Financial Economics Mark P. Keightley Specialist in Economics April 24, 2015 Congressional Research Service 7-5700 www.crs.gov

More information

Exchange 101. August 2013

Exchange 101. August 2013 Exchange 101 August 2013 455430 27517 Penalties for individuals 2017 and beyond: Annual adjustments 2016: Greater of $695 or 2.5% of taxable income 2015: Greater of $325 or 2% of taxable income 2014: Greater

More information

Part VII Individual Retirement Accounts

Part VII Individual Retirement Accounts Part VII are a retirement planning tool that virtually everyone should consider. The new IRA options also have made selecting an IRA a bit more complicated. IRA Basics The Traditional IRA is an Individual

More information

Farm Financial Management

Farm Financial Management Farm Financial Management Your Farm Income Statement How much did your farm business earn last year? There are many ways to answer this question. A farm income statement (sometimes called a profit and

More information

CREATE TAX ADVANTAGED RETIREMENT INCOME YOU CAN T OUTLIVE. create tax advantaged retirement income you can t outlive

CREATE TAX ADVANTAGED RETIREMENT INCOME YOU CAN T OUTLIVE. create tax advantaged retirement income you can t outlive create tax advantaged retirement income you can t outlive 1 Table Of Contents Insurance Companies Don t Just Sell Insurance... 4 Life Insurance Investing... 5 Guarantees... 7 Tax Strategy How to Get Tax-Free

More information

2013 Year-End Tax Planning Advice

2013 Year-End Tax Planning Advice 2013 Year-End Tax Planning Advice To Our Clients and Friends, As we approach year-end, it s again time to focus on last-minute moves you can make to save taxes both on your 2013 return and in future years.

More information

June 2015 Newsletter

June 2015 Newsletter June 2015 Newsletter News From Silver Bridge CPAs TAX TIPS & TRICKS Consider Setting Up an Idaho Medical Savings Account! The state of Idaho has established a tax deduction for contributions made to an

More information

MCCLANAHAN & EATON, LLC CERTIFIED PUBLIC ACCOUNTANTS

MCCLANAHAN & EATON, LLC CERTIFIED PUBLIC ACCOUNTANTS , LLC CERTIFIED PUBLIC ACCOUNTANTS It's that time of year where we should think about preparing an estimate of your current year tax liability and see if we can reduce that liability. There are several

More information

FAQ for the First-time Homebuyer Tax Credit

FAQ for the First-time Homebuyer Tax Credit FAQ for the First-time Homebuyer Tax Credit The following 24 questions and answers provide basic information about the new home buyer tax credit. If you have more specific questions, we strongly encourage

More information

Financial Management: Cash vs. Accrual Accounting

Financial Management: Cash vs. Accrual Accounting E-475 RM5-16.0 10-08 Risk Management Financial Management: Cash vs. Accounting Danny Klinefelter, Dean McCorkle and Steven Klose* Selecting a record-keeping system is an important decision for agricultural

More information