Many changes occurred with income taxes with the passage of the so-called fiscal cliff legislation on January 2nd. Sarah Windham, Sr. Tax Manager with Dixon, Hughes & Goodman with offices in North & South Carolina explains some of the provisions were retroactive to 2012:
“There are a handful of things that people should be aware of. The bill wasn’t passed until Jan 2nd of this year, but quite a few things were made retroactive to 2012. Its too late for planting, but if you bought some equipment or machinery during 2012, they extended some depreciation rules that had expired, allowing anyone to write off $500,000 of section 179 Depreciation up front on new or used equipment as well as 50% bonus depreciation on any new equipment that was purchased in 2012.”
Windham explains that another provision could be a big cash flow opportunity for farmers:
“When filing their 2012 taxes, farmers might want to be aware of a tax law that allows a ‘qualified farmer or fisherman’ to file their tax return and pay their tax by March 1st. so if they file and pay by March 1st they are not penalized if they haven’t made estimated tax payments during the year.”
With the late changes, Windham says filing taxes is slow this year simply because some of the forms aren’t ready:
“Many forms that affect farmers are not ready, the IRS has not released them. They have extended the due date for farmers to April 15th.”
We’ll hear more from Sr. Tax Manager Sarah Windham on tax changes tomorrow on Inside Agriculture.