Tax Planning

Do not forget to plan your tax planning assembly

There is a lot of talk about the Biden Administration’s Build Back Better Act, with much concern being expressed about what is in that plan and how it will affect farmers and ranchers.

With 2,135 pages to wade through, there’s a lot of speculation about what the Build Back Better Act entails. If you want to sort it out, you can read it here.

Given the many rumors of a methane tax in this bill, it is important to make it clear that the language does not include clear taxation of emissions from livestock farming.

However, it is also evident that we need to review the contents of this document critically and understand what unintended consequences could be for our industry based on what is contained in the text.

But to be clear, Sam Kieffer, Vice President of the American Farm Bureau Federation for Public Affairs, released a statement on the Build Back Better Act earlier this fall.
Kieffer: “To clear up any ambiguity, I would like to make it clear that the current language of the Reconciliation Act does not impose a methane tax on agriculture.

“That summer, American Farm Bureau economists conducted an analysis on behalf of members of the Congressional Committee to determine the potential impact of including agriculture in legislation introducing such a tax. We have done this based on the formula contained in legislative proposals that impose a methane tax on the oil and gas sector. We believe this analysis was insightful and helpful in showing that such a tax would have been devastating to agriculture.

“While we oppose any methane tax, the Farm Bureau is grateful to legislators for recognizing the low margins in agriculture and that such a tax would undoubtedly put family businesses out of business. We are particularly grateful to the Senate for passing an amendment that specifically excludes agriculture. “

With so many unknowns ahead of us, it can be easy to fall into the “what if” game and play through the worst-case scenarios in our heads; However, as we prepare to close in 2021, now is a good time to manage what we can control at home and on the ranch.

Here’s your kind reminder that it’s time to call your accountant and schedule a tax strategy meeting before the end of the year.

With seven weeks remaining in 2021, we have a short window of time to make strategic investments or defer purchases. We can evaluate the current tax law and listen to our experienced team of experts – our banker, lawyer and tax advisor – to help us make smart decisions for this year and the coming.

I know you’re busy outside, winterizing the ranch, preparing for the upcoming calving season, finishing the harvest, checking cows for pregnancy, questioning weaned calves, hauling hay home and all the other things on our plates, but plan an hour in an office and take the time to organize yourself, put a pencil on paper, and with your team evaluate how you are moving forward and what steps you need to take to move forward.

Make sure to ask your team of specialists where they see gaps in your business model so that you can improve your operations over the next year. Ask them about current trends and the opportunities they see in the year ahead. And be honest with your own business situation and determine the best path forward so that you can thrive, not just survive, in an uncertain season in animal husbandry.

Do not fall into the trap of scare tactics. Instead, plan, prepare, and take the time to prepare for success, even if the worst results occurred. You have that! And your willingness to strategize and analyze how to respond to results will set you apart for years to come.

Amanda Radke’s opinions are not necessarily those of beefmagazine.com or Farm Progress.

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