(National Association of Farm Broadcasting)- Farmers and ranchers could get hit with a huge tax bill unless the Tax Cuts and Jobs Act, expiring at the end of next year, is renewed.
USDA Economic Research Service Economist Tia McDonald studied the impact of the expiring 2017 tax law and the provisions of the pandemic-related American Rescue Plan.
“Across all farm households, tax liabilities are expected to increase, on average, 22 hundred dollars or 12% from the expiration of these specific provisions.”
McDonald says that’s including lower tax rates, a cap on state and local taxes, a bigger standard deduction, and personal exemptions.
“We estimated that the impact of these expiring federal income tax provisions would increase tax liabilities by almost $9 billion. And then, the expiring estate tax exemption would increase estate tax liabilities by almost $650 million.”
Other major tax policies that could come to an end are the qualified business income deduction, the child tax break, the estate tax exemption, bonus depreciation and the alternate minimum tax. However, Liz Swanson with food and ag consulting firm Pinion, says renewing all of those tax breaks would cost trillions of dollars.
“The newest estimates we’ve seen is that a full extension of the TCJA is going to cost $7.75-trillion through 2035.”
Swanson says given the current state of the agriculture economy, farmers and ranchers can’t afford any more hits to their bottom line. But, she says, because of budget limits Congress may have to “pick and choose” which 2017 tax provisions get extended and which ones don’t.
Comments