So, things are different and better now that it is 2021, right? More like just different, not any better or any worse than the year prior. The sun will still set too early when you need that extra time to finish and the wind will still blow harder than you like when you are outside. Somethings, like the government present the same old problems but in new packages.
Many eyes in ag are fixated on what possible changes are coming down the pike with the new administration in the federal government. Signals indicate the COVID 19 response is going to be the center stage well before environmental changes, tax changes, or foreign policy changes take the spotlight.
Many are concerned about a tax increase. The current plans proffered by the incoming administration, which have to be adopted by a razor thin margin in both chambers of the legislative branch are focused on income earners who net more than $400,000 per year. Key tax provisions are scheduled to expire or phase out in the coming years, to include 100% bonus depreciation, the current tax brackets, the increased standard deduction, childcare credits, the limitation of itemization deductions, and the QBI deduction for non-corporate taxpayers. Additionally, the high estate exemption (Currently at 11.7 million per person) is also slated to sunset by 2025. Look for potential deals on these items in standalone legislation or in part of other legislative packages to pay for infrastructure or environmental programs. The incoming Secretary of the Treasury, former fed chief Janet Yellin, is likely to push the administration to delay any sweeping tax reforms resulting in increases until the economy has its feet back underneath it.
Environmental legislation is highly likely. The positioning of Tom Vilsack as Sec of Ag is a win for farmers as is the continuation of Debbie Stabenow as Senate Ag Committee chair. She has a reputation for fighting for farm operators, which may help farmers actually benefit from proposed carbon sequestering programs as opposed to the ever-growing list of “middleman” carbon credit traders, brokers, and aggregators that look to, as merchants time eternal have done, take a skim on the payment to make the system work. Details about mandatory or voluntary and credit for existing practices are simply not available.
The farm bill hearings for the next farm bill this year are likely to be broad, fact finding type hearings, but the real fight comes after the 2022 midterm elections before the 2023 Farm Bill. It is of note that Collin Peterson of Minnesota was defeated and a longtime ally of production ag is gone from the house Ag committee. With Biden only carrying 16 percent of counties of the US (which is useful to see that his voter base is urban and urban adjacent), a push for even more of the Farm Bill (which is 90% food related) to go to urban food priorities may be coming.
The IRS won a tax court case confirming that the executor and the beneficiary of an estate are both responsible for unpaid estate taxes
Remember that rental property idea you have has some limits. If you lose more than $25,000 on your rental project, that loss is limited. If you make over $100K but less than $150K you have a sliding scale down from that $25,000 in what your limits are and if you are over $150,000 in earnings after some technical adjustments, you cannot take a rental loss.
If you got a letter from the IRS saying you owe money, look for the Barcode on the letter. With a QR reader on a smart phone, you can use the reader to get directly to the IRS’s claims resolution website.