It’s time to talk taxes again. President Joe Biden’s tax plan, which includes the American Families Plan and American Jobs Plan, has both good and bad news for farmers, says Paul Neiffer, a CPA and principal with CLA and author of the “Farm CPA” blog.
The proposed changes represent the most dramatic shifts in tax policy since 1986, Neiffer says. He shares an overview of the key changes in his online Farm Journal Field Days presentation.
In light of the proposed changes, Neiffer has the following recommendations for farmers.
- Don’t panic. The changes are still proposals. “The final rules will likely happen in December, if they happen at all,” he says.
- Be ready to make gifts. “You definitely want to be ready to make some large gifts this year because your ability to do those gifts after this year may be curtailed or eliminated,” he says. “But do not make gifts if it’s going to curtail your retirement funding.”
- Discuss your options with your income and estate tax advisers.
- Keep posted on the changes. With each new proposal that affects farmers, Neiffer will share his thoughts on his blog and in Top Producer magazine.
The bottom line, Neiffer says, is these changes could just be temporary.
“If there’s a complete change in the House, Senate or President in four years or so, a lot of these proposals that become law may get taken out,” he says. “Be aware of the proposals but realize not all of them are going to go through.”
To hear Neiffer’s thoughts on the estate tax proposals, transfer tax, 1031 exchanges, discounts, charitable remainder trusts and more, register or log in to Farm Journal Field Days.
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