Save on taxes on farm equipment
Written by admin on September 18, 2009 – 7:24 pm -Accelerated depreciation for farm equipment
Tax time will be here before you know it – and certainly before most of us want it to be. But it is inevitable. Hopefully I can ease its arrival of some farmers by reminding you of the benefits of accelerated depreciation for farm equipment.
Farmers have until December 31, 2009, to take advantage of the accelerated depreciation schedule for most farm equipment. The bonus depreciation measure (which reduced the depreciation schedule for most agricultural equipment from seven to five years) was extended until the end of 2009 under the economic stimulus package passed this year.
There is no guarantee the accelerated depreciation schedule will be extended again, says Paul Kindinger, president and CEO, North American Equipment Dealers Association (NAEDA). In fact, the measure almost did not pass this year. If the new economic stimulus package works, Congress will likely have less enthusiasm for an accelerated depreciation tool because it costs the U.S. Treasury and is supposed to be a temporary tool, Kindinger says.
The accelerated depreciation schedule definitely helps farmers who have had some good financial years recently and would rather invest income in new equipment than pay it in taxes. 2009 net farm income is expected to be the third or fourth largest in U.S. history.
To find out how your operation might benefit from the accelerated depreciation schedule, contact your local CPA or tax attorney.
Tags: Farm Economy, Tractors
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