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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

Yes, I was referring to topline income.

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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

I would assume that for even many farmers who did a reasonable job of tax management that the deferrals from the good times are going or gone.

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Esteemed Advisor

Re: Half of it back in taxes? Maybe you need....

An excellent reply from the Gentlemen from Ky. Thank you. Our numbers are extremely similar to yours.

We still have about 45%of annual gross in deferred income left Dave. About 3 more years worth in the big scheme, and I suspect we will have a very good year soon, and increase the defer amount again. We haven't been current since a partners death in 1986, not that it matters in any way.  Of course, we have made money every year except one recently on a consolidated basis.

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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

I'm not real current on the ACA stuff- wasn't aware that the subsidies are so generous. 

By happenstance I am among the minority of people in their 60s who could probably get a "cheap" individual policy under the old system- but I'm on my wife's insurance for another year, then medicare. That is a reason she'll work another year.

But for the most part, the majority of people over 50 ought to thank their lucky stars.

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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

Political, I guess.

But just on a actuarial basis and given the nature of the previous "system", young self employed people probably have a beef with this system, although they're also more likely to qualify for subsidies.

Older, pre-medicare age- not so much.

What's the median age of farmers?

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Advisor

Re: Half of it back in taxes? Maybe you need....

Hollowhead says:

Re: Half of it back in taxes? Maybe you need....
I'm not real current on the ACA stuff- wasn't aware that the subsidies are so generous.
By happenstance I am among the minority of people in their 60s who could probably get a "cheap" individual policy under the old system- but I'm on my wife's insurance for another year, then medicare. That is a reason she'll work another year.
But for the most part, the majority of people over 50 ought to thank their lucky stars.

So you finally admit that you have no clue about how ACA works. 

I have a large family, plus we support some disabled family members, too. There is no way I could keep my income under the ACA thresholds and still put food on the many tables. So effectively, I start out with another $20,000 in ACA effective taxes because I make too much.

I don't have a problem taking the "subsidies".

And the number, BA, isn't 67 cents per bushel...it is 16 cents. Not going to make a big impact, but it is something.

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Honored Advisor

Re: Half of it back in taxes? Maybe you need....

Hey Red, I saw this on DTN. I think 35¢ comes from CCC and 32¢ comes from Cares Act.  It might deal a deal where you get half your payment in a week or so and then way in the future you get a direct deposit notice and you wonder "what was that for? Oh yeah the deal I signed up for back in May"  Smiley Happy

https://www.dtnpf.com/agriculture/web/ag/news/business-inputs/article/2020/05/19/usda-spells-payment...  

 

snip:

A producer will be paid on that commodity in storage, but the inventory cannot be higher than 50% of total 2019 production that the producer reported to the Farm Service Agency. Effectively, a farmer who grew 100,000 bushels or more in 2019 and has 50,000 bushels of 2019 corn in storage, unsold, on Jan. 15 would be paid on the 50,000 bushels

Yet, it is more complicated the way the rule is spelled out.

Half of that 50,000 bushels would be paid 32 cents from the CARES Act, and the other 25,000 bushels would be paid 35 cents from the Commodity Credit Corp. Essentially, USDA officials explained, when it is boiled down, the 50,000 bushels would be multiplied by 33.5 cents. That breaks down to 50,000 x 0.335, or $16,750.

For soybeans, the payment rates are 45 cents a bushel from the CARES Act and 50 cents a bushel from CCC. A farmer with 50,000 bushels unsold in storage from the 2019 harvest on Jan. 15 would be paid on 25,000 bushels at 45 cents a bushel. The other 25,000 bushels would be paid at 50 cents a bushel. That equates to $23,750 (50,000 x 0.475)

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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

Erik appears to be knowledgeable on the matter, was merely assuming he knew what he was talking about.

Now let's talk about those disabled relatives you support.........

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Senior Advisor

Re: Half of it back in taxes? Maybe you need....

I guess maybe I expressed a political opinion by saying, "gee, that doesn't sound so bad" in regard to the assertion.

But without any opinion, let me tell you about the politics of this. Republicans got slaughtered in the midterms in swingy suburban districts over the question of coverage for pre-existing conditions. Mostly by moderate Democrats who resemble old Republicans.

A few million people in the individual pools who don't get a subsidy aren't enough to move the political needle.

As I've been saying for 10 years- I'm all ears on a better way to do it.

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Honored Advisor

Re: Half of it back in taxes? Maybe you need....

Paying taxes on farm subsidies?  Paying social security tax on land enrolled in the CRP when if you rented it to a farmer the rent procedes wouldn`t be SS taxable?   Some will say "Look, you won life`s lottery, quit belly achin` "  and yeah, it is what it is, death & taxes. 

However a couple we`re friends with, the wife got bit on her face by a dog of some folks they were visiting (Thank God, not us)  and the insurance company gave her a blank check that was a "farm buyin` size" and not a dime of that punitive damage settlement was taxable. 

I wouldn`t let a German Shepard bite my face for a farm that`s tax-free but, damages such as that are to "make you whole" for "pain & suffering" the argument could be made that CFAP should be tax-free.  A few years ago Governor Pawlenty gave a $800 stimulus check and Minnesotans complained that it all went back and more in their taxes the next year.  There is no free lunch....for me anyway.

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