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ihtractortherap
Senior Contributor

Couple things.

 
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7 Replies
ihtractortherap
Senior Contributor

Re: Couple things.

Just figured my income tax bill. Where did all my money go they say I made. Oh yeah to pay Sec 179 payments. Anyway equip needs are met for next 10 years. Have a feeling it will be a slow grind.
Just wondering what kinda a tax bill is generated by guys who bought 10,000 dollar acre ground.
Looking for a SoyRoy spring rally.
No frills for awhile. No auto steer , fancy dancy yield monitor. I will spend money on tile though
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roarintiger1
Honored Advisor

Re: Couple things.

You my friend, are not alone.   Smiley Wink

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BA Deere
Honored Advisor

Re: Couple things.

That could be a problem for some that bought high priced land that was maximum financed.  You have to make alot of money...then, pay tax on it...then, make the land payments.  It`s even a little worse than having 179`d machinery, however if you crawl across the finishline 20 years from now, you will hopefully have a paid for farm.

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Hobbyfarmer
Honored Advisor

Re: Couple things.

It is called "family living"

The health care thing is gonna break many budgets.

My suggestion is to check into a company called Base

It is in Adel, iowa. Follow the rules and at least be able to deduct all medical expenses including insurance premiums.

On another topic it is painfully clear many on here have only a D- understanding of a cash purchase and the proper place for a 179 deduction.
(The grade really is an big red F)

If you borrow your "cash" , you did not make a cash purchase and should not even consider 179. Until you don't borrow operating money you are not a real cash purchaser.

depreciation deduction is just a tax postponement until the thing is sold or you die. Most times the thing brings much less than it cost. So there is a tax savings


Paying more taxes in the good times just for grins and giggles with the idea it'll help you in non profitable times will help insure your poverty status all the time.
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BA Deere
Honored Advisor

Re: Couple things.

As abruptly as grain prices went down even if honest cash was used in 179 purchases, it still can take a bite. If a guy 179`d machinery to save money on taxes when corn was $3 and the next year it went to $7 that works alot better than avoiding taxes on $7 and it goes down to $3.

 

Everybody`s situation is different, if you are independently wealthy and you have a crop "one in the field, one in the bin and one in the bank" then that`s one thing.  But if you pay cash for machinery and 179 and all of a sudden the profitability rug is pulled out from under you, you kind of miss those yearly deductions.

 

Bottomline, there`s getting out of taxes, the most you can do is delay them but sooner or later you pay.  Maybe by stretching the taxes out you can fiddle yourself into a lower tax bracket, but that`s the best you can hope for.  

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Hobbyfarmer
Honored Advisor

Re: Couple things.

Don't see how using deductions available when times are good and you are in a higher tax bracket is a bad thing. Yea let's save that for when we are in a lower income/tax bracket, maybe even in a loss situation.

 

My comments are based on that rich guy you just mentioned. I have a guy in the area like that his boys were a little envious of him but I think they have joined him. They just bank out of their check book. Took discipline, hard work, and great timing on when to be born.

They farm a lot of almost disaster proof land most of it bought decades ago.. The younger one told me he wouldn't farm my farm if it was given to him.

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ihtractortherap
Senior Contributor

Re: Couple things.

Could pay off my machinery however keeping cash for operating.
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