NCBA’s Tax Work Can Save You Money

Those of us who haven’t done our year-end tax planning yet should start thinking about it.  We should all probably do more year-end planning this year, because the new tax law, in effect this year and known as the Jobs & Growth Tax Relief Act of 2003, allows farmers and ranchers to write off  additional amounts against income, thus substantially lowering the tax obligation.  This is of particular benefit this year with cattle prices greatly improved. 

Your NCBA Washington staff, and members, worked hard to get these and other tax benefits written into the new law.

Two areas of change that you could take advantage of immediately:

1.  Before, under Tax Code §179, you could expense the first $25,000 as an expense for an item the year it was purchased. That has been raised to $100,000 for the years 2003 through 2006. 

2.  The other new provision raised the first year depreciation deduction to 50 percent for this year.

These changes allow some of that extra profit to go toward upgrading your operation or paying off debt rather than paying it in taxes.