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Back in 2017, Congress passed the Tax Cuts and Jobs Act, which gave tax breaks to many farmers and ag businesses. But many of those tax breaks are set to expire in 2025. Several ag leaders are concerned that if those tax breaks expire, tax bills for Indiana’s farmers will increase significantly.
“If nothing is done to extend them beyond 2025, farmers will face well over a nine-billion-dollar tax increase in 2026 between increased income tax liability and the increased estate tax liability. The expiration of 199A alone would see certain farms’ tax liability increased by up to 20 percent,” says Dustin Sherer, Director of Government Affairs for the American Farm Bureau Federation.
He says the Tax Cuts and Jobs Act is important for farmers.
“It lowered taxes for most individuals as well as most businesses of every size and type, including farms and ranches,” according to Sherer. “The legislation is important for farmers and ranchers because 98 percent of their operations are organized as pass-throughs, and there were specific provisions included in the bill that benefit pass-through businesses, including the broader brackets and lower rates, the enhanced estate tax exemption, and the 199A qualified business income deduction that drives more rate parity between the top rates that small businesses pay and the 21-percent corporate rate.”
Sherer recommends having a conversation with your tax professional ahead of time to find out what your own personal tax liabilities might be without those tax breaks. Then, have a conversation with your lawmakers on Capitol Hill about the importance of renewing those tax breaks.
“Arm yourself with information. Do some research or talk to your CPA to understand how these various provisions of the tax code are benefiting your operation and how your operation is utilizing the savings from the provisions enacted by the Tax Cuts and Jobs Act. And once you do that, talk to your elected officials. Tell them your personal story and tell them what the consequences would be if these options went away. Educating elected officials with personal stories is the best advocacy there is,” he says.
Source: NAFB News Service