Tax Updates to Help Reduce your Tax Bill
Kyle Woiwood from UHY Advisors sits down in the studio to give us all the tax law updates. Don't worry he helped keep it entertaining! Everything from bonus depreciation to tax benefits for retiring farmers. Kyle helps us cover it all to make sure you have the latest updates on tax laws!
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NEW Legacy Farmer Segment – Play clip and react #11 – (2nd to LAST ONE)
- Why is it important to have a tax planning meeting before the end of the year?
- When you sit down with a new client or perspective client how does that first meeting usually go?
- After you have worked with clients for a while what are ways you or other accountants can bring value year after year?
- What are some updates for the 2022 tax year?
- Standard mileage rate. The business standard mileage rate from January 1, 2022, to June 30, 2022, is 58.5 cents per business mile. The business standard mileage rate from July 1, 2022, to December 31, 2022, is 62.5 cents per business mile.
- Increased section 179 expense deduction dollar limits. The maximum amount you can elect to deduct for most section 179 property you placed in service in 2022 is $1,080,000. This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2,700,000. Also, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2022 is $27,000.
- Maximum net earnings. The maximum net self-employment earnings subject to the social security part (12.4%) of the self-employment tax is $147,000 for 2022, up from $142,800 for 2021. There is no maximum limit on earnings subject to the Medicare part (2.9%) or, if applicable, the Additional Medicare Tax (0.9%). See chapter 12.
- Benefits of Recordkeeping
- Everyone in business, including farmers, must keep appropriate records. Recordkeeping will help you do the following.
- Monitor the progress of your farming business.
- Prepare your financial statements.
- Identify source of receipts.
- Keep track of deductible expenses.
- Prepare your tax returns.
- Support items reported on tax returns.
- Anything in effect from last year that is still key information?
- What do you see your top tier of clients doing that you believe got them there or keeps them there? Both financially and on their farms in general.
- What are some questions our listeners should have prepared for their meetings with their tax preparers?
- If a farm operation or farmer is reaching 3-5 years from wanting to retire, what advice would you give to begin working on that plan?
- Are there any other points you’d like to share with our listeners?
- What’s the best advice you have ever been given?