—Lancaster Farming, Saturday, Dec. 18, 1976 80 Tax management time NEWARK, Del. - Farmers don’t need to wait until then tax forms arrive and all changes in tax laws are known to begm the annual job of tax planning. There are very few changes m the Tax Reform Act of 1976 that affect far mers directly, explains University of Delaware Extension economist, W T McAllister. In fact, there’s a good chance that new tax forms and guidelines won’t be available until after January 1, 1977. That’s too late to take action to affect farm mcome or expenses for this year. Any such action must be taken no later than December 31, 1976. Farmers have a number of tax management options. McAllister suggests they consider these now, while there is still time to take certain steps which may affect their taxable mcome for the year. Investment credit is one of the options to consider. The 1976 Tax Reform Act con tinues investment credit at the 10 per cent level for the next four years. This means that you don’t need to pur chase capital items that qualify for investment credit before December 31,-just to get the full 10 per cent. Any purchases of this nature should be based on need and profit justification, and whether the credit is likely to be worth more to you this year or next. You must claim the credit in the year m which the purchase is made, explains the economist. But unused credit can be carried back three or forward seven years. On the subject of taxable income levels, the economist also has some advice. Estimate your level of taxable income for 1976. Compare this with prior years and your expectations for 1977. Depending on whether this year’s income is unusuaully high or low, you may want to make some shifts. If your taxable income is unusually large, borrowing to pay current bills by December 31 may be justified. Buying ahead is another adjustment to consider * JIG TRUCK ' HAULING I WITH YOUR PICKUP I AND THE... ynSSmea. Agri-Trailei™ - , J 10^ Kauffman’s Agri-Trailer Sales Elizabethtown during a high income year To do this, contract and pay for a specified amount of necessary supplies before December 31. Be very sure that the purchase is final and not just a deposit against future needs. Be ready to show a price break or other economic incentive for your purchase The basic rule of the In ternal Revenue Service is that there must be a vahd busmess reason for making advance purchases And reduction of income taxes is Two-speed landing Easy hook-up with gear provides wide-opening jaws easy hitching. of Pin & Plate. Hitch this versatile trailer to your truck for road travel, switch it to your tractor for field loading. The Winnebago Agri-Trailer can carry as much as a 3-ton truck. It can haul over Th tons Or 285 bushels of gram. Winnebago's sth wheel design gives unique stability. It turns short, backs up . easy, and trails true at highway speeds without fishtaihng. A "l 1 i Box 655 RDI 717-367-3550 not a valid reason, points out McAllister Reasons that are valid include (1) has been a common practice over past years, (2) to assure a stock of critical production sup plies; (3) to get a lower price, (4) other good business reasons Should your preliminary check indicate that your taxable income will be ab normally low this year, you may wish to defer certain expenses until after the first of the year. You may also wish to advance certain ip Pennsylvania now IS sales and calculate depreciation on a straight line basis The goal of tax prepared a helpful fact sheet management is to even out on these and other tax the peaks and valleys of. management alternatives, farm income, explains For a free copy of “Tax McAllister. Another method Management by Farmers - of handling wide swings"in 1976 Tax Year,” contact year to year income is MAILROOM, Agricultural You’ll brag for mouths about the deal you got on your Madison Silo. 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There’s nothing for you to do. No hidden extra costs. Eight Key Questions Answered: Questions you really should ask before you buy any silo are answered in our new Madison Silos booklet. Send the coupon below for your copy. Even better, ask the Madison Silos dealer near you. No obligation! Ask him about Madison Silos’ full “System of Choice,” too. It adds Nutn-Manc, Gram-O-Matic and Manure Bank to vour Madison Silo. f" ——————— -1 Dept. M 19126 Chromalloy Farm Systems Madison Silos P.O. Box 271, Madison, Wis. 53701 I’m interested in a great deal on a 1977 Madison Silo! of Madison Silos’ “Eight Key Questions” booklet. Name Street or RFD I Town ■ Type of livestock ■ Check here if student □ through income averaging, using Tax Schedule G. Whatever you do, the first step is to calculate your estimated taxable income. Don’t be misled by the fact that you feel poor or flush. Use your records to deter mine the real facts. The economist has Making thin j BSfr. FA CHI State. Number
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