cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Honored Advisor

The impact of an income tax grain rally.

From what I have read and gathered from the IRS is that farmer's income taxes which were normally due March 1st will now be due April 15th.   Many times over the years, the grain market slumped in February due to farmers selling grain to pay taxes by March 1st.   With farmers in a better position financially and possibly not needing as much cash flow, is the market going to need to rally in February to get the grain that the farmers control into the pipeline?  It's hard to believe that the IRS might have inadvertantly caused a grain shortage thus leading to higher prices.   Thoughts?

0 Kudos
8 Replies
Highlighted
Veteran Advisor

Re: The impact of an income tax grain rally.

Do farmers ever file late extensions?
0 Kudos
Highlighted
Senior Reader

Re: The impact of an income tax grain rally.

The March 1 deadline is actually only an exception to making estimated income tax payments it is not an actual due date for filing.  For this year a farmer doesn't have to file and pay until April 15th.

0 Kudos
Highlighted
Senior Advisor

Re: The impact of an income tax grain rally.

I make federal tax deposits in december and have until april 15 to finalize the return. I am prepare to finalize the 1040 now but like to wait for the 1099's to confirm my figures. I will send the return in early February which give the CPA plenty of time to finalize it. I prefer to have it done quickly so that I know what further obligations I may have.

0 Kudos
Highlighted
Esteemed Advisor

Re: The impact of an income tax grain rally.

Not sure why you feel the Feb break was caused by taxes being due on March 1st. Taxes due haven't been a very big number for grain farmers for most of the past 100 years. This year a bigger impact but still grain movement is huge after 1/1 every year. Due to the RETROACTIVE change in bonus depr and sec179 for 2012 (simply silly for a outfit $1tril in the hole every year), and the amount of new paint bought, taxes are likely not a very big deal this year.

 

It is the natural seasonal event triggered by lots of things, mostly the delivery of grain by farmers after they deferred the income into the next tax year starting on 1/1. The river is closed so export demand is greatly reduced. It usually rains in SA so their production looks assured. Just lots of things. The biggest change in the last 10 years is the insurance price fix period which has tended to strengthen c/soy in February.

 

Krafty is right, real farmers are the only ones with returns due March 1, not the wealthy land owners like himself :-)))))

0 Kudos
Highlighted
Senior Contributor

Re: The impact of an income tax grain rally.

Bonus depreciation was not changed for 2012!

0 Kudos
Highlighted
Honored Advisor

Re: The impact of an income tax grain rally.

time,  No matter how much farmers made in the past, the traders knew that farmers would have to sell grain to pay whatever taxes they owed.   Not sure why anyone would think otherwise.     Of course this past year,  taxes would not be a problem only if you forward contracted your grain, and you won't have as much tax to pay as you could have.  Most farmers that I know are paying more tax than they ever have.....Taxes ARE a big deal.....bonus depreciation or not.

0 Kudos
Highlighted
Senior Advisor

Do you mean

That farmers that sell a million $$'s worth of grain do not retain some of that cash for taxes? You don't have to spend it all.  Keep back a little bit so you don't have to pay this years taxes with next years income. LOL

 

BTW I'm still and owner operator.

0 Kudos
Highlighted
Senior Contributor

Re: Do you mean

Can't we at least categorize you as a wealthy land owner.   I aspire to be one of those also.

0 Kudos