Are You Leaving Money on the Table?

Jun 12

As we reach the midpoint of the year, it’s a smart time for producers to revisit their financial plans and look for areas where they may be leaving money on the table. One of the most overlooked areas? Tax deductions and credits specifically available to farmers and ranchers.

These aren’t just year-end considerations. Mid-year is the perfect time to course-correct and ensure you’re taking advantage of opportunities that can reduce your tax burden and improve cash flow.

1. Prepaid Expenses

If you’re a cash-basis taxpayer (as many in ag are), you can deduct certain prepaid expenses such as feed, seed, fertilizer, and other supplies, as long as they don’t exceed 50% of your total deductible farm expenses. Timing these purchases can create strategic write-offs.

2. Repairs and Maintenance

Routine maintenance and repairs on equipment and buildings are often fully deductible. The key is distinguishing between a repair (deductible) and an improvement (which must be capitalized and depreciated).

3. Depreciation on Equipment

Don’t forget Section 179 and bonus depreciation options. New and used equipment purchases, breeding livestock, and even certain improvements like fencing or grain bins may qualify. With rules changing often, mid-year is a good time to reassess your depreciation strategy.

4. Fuel Tax Credits

If you’re using fuel for off-road purposes such as tractors, combines, or irrigation pumps, you may be eligible for a federal fuel tax credit. It’s paperwork heavy but worth the effort.

5. Conservation Expenses

If you’ve invested in things like erosion control, water conservation structures, or environmental improvements, you may be able to deduct those costs. These incentives are often underused.

6. Cost of Goods Sold Adjustments

Tracking costs like breeding fees, feed, vet care, and custom hire labor tied directly to production can allow more accurate reporting and potentially lower taxable income.

7. Family Wages and Employment Credits

Paying wages to family members can be deductible, as long as the payments are reasonable and the family member is doing legitimate work. There may also be employment credits available depending on your state.

What You Can Do Mid-Year

Review your bookkeeping. Make sure expenses are categorized correctly.
Forecast income and expenses. Get a clear picture of where things are headed.
Talk to a tax advisor who understands ag. The best opportunities are the ones you don’t miss.

A mid-year check-in is a small step that can lead to real savings.

Not sure where to start? Let’s talk. We’ll help you spot what you might be missing, and make a plan to keep more of what you earn.

Amanda Holder

I am a dedicated professional who values faith, family, and hard work above all. With a strong foundation in Christian beliefs, I bring a deep sense of integrity and compassion to everything I do. I am passionate about supporting farmers across the nation, helping them navigate their financials and ensuring their businesses thrive. Through trusted partnerships and a hands-on approach, I work tirelessly to provide practical solutions that allow farmers to focus on what they do best—growing and cultivating land and animals.

When not working, I enjoy spending time with my family and friends, fostering meaningful relationships and prioritizing those closest to me. I believe in the importance of balancing professional commitments with personal values, striving to make a positive impact both in my work and within my community.