—Lancaster Farming, Saturday, December 10,1977
122
December
management planning time
DOVER Del. - Income tax
time is rolling around again
and farmers who intend to do
some tax planning had
better get down to the job
soon. They shouldn’t wait
until their tax forms arrive
and all changes in tax laws
are known. It will be too late
then to make any ad
justments to 1977 taxable
income, points out
University of Delaware
Extension economist, W.T.
McAllister. There are few
changes in the Tax
Reduction and Sim
plification Act of 1977 that
affect farmers directly.
Red meat up
HARRISBURG - Red meat
production in Pennsylvania
during October 1977 totaled
95.3 million pounds, up five
per cent from a year earlier
according to the Penn
sylvania Crop Reporting
Service.
Cattle slaughter at 95,300
head was up 10 per cent from
October 1976. Calf slaughter,
at 33,800 he.ad was down 17
per cent, hog slaughter at
244,700 head was down six
per cent, and sheep and
Drainage Pays
High Returns
Typical
Investment Annual Return
Land Drainage 2146% (d)
Farm Buildings 3-23% (d)
Farm Land 11% (e)
Stocks 7.4% <f)
Bonds 6.1% (g)
COMPARE
Even with the conservative figures shown
above, it’s obvious that land drainage
should top farmers’ lists of investment
priorities.
COCALICO EQUIPMENT CO.
BfflT DRAINAGE & EXCAVATING
\u CA/ RD#3 DENVER, PA. 17517
\ / (215)267-3808
Farmers have a number of
tax management
The economist suggests they
consider these now, while
there is still tune to take
certain steps which may
affect their taxable income
for the year.
Investment credit is one of
the options to consider. This
will continue at the 10 per
cent level for 1977 taxes and
for 1978, unless changed by a
new tax law next year. This
means that one doesn’t need
to purchase capital items
.that qualify for investment
credit before December 31,
just to get the full 10 per
lambs slaughter at 11,200
head were down three per
cent from October 1976.
Nationally, commercial
red meat production during
October 1977 totaled 3.3
billion poimds, down four per
cent from a year earlier.
Cattle slaughter was down
three per cent, calf slaughter
was down one per cent, hog
slaughter was down six per
cent, and sheep and lambs
slaughter were down five per
cent from October 1976.
is farmer tax
cent. Any purchases of this
nature should be based on
need and profit justification,
and whether the credit is
likely to be worth more this
year or next. One must claim
the credit in the year in
which the purchase is made,
explains McAllister. 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. One
should estimate his level of
taxable income for 1977 and
compare this with prior
years and expectations for
1977. Depending on whether
this year’s income is
unusually high or low, a
person may want to make
some shifts. If the taxable
income is unusually large,
one should pay all current
bills by December 31, even if
borrowing funds is
necessary.
Buying ?h*»nd is another
adjustment to consider
during a high income year.
To do this, one contracts and
Pov
micro
25-^
Deluxe
Dcluxa
12" sprt
and chro
Vinyl coi
ADAMS CO.
REEDY BROS. COMPANY ofi 0 fi S 7 S J OLT f£ US H
RD 4 Gettysburg, PA ad
717-334-3710 Kmzers, PA
WEBER’S HARDWARE
100 W Mam St
Mechamcsburg, PA
717-766-3451
LANCASTER CO.
ANDREW BEILER
196 Eastbrook Rd
Smoketown, PA
FISHER'S LAWN &
GARDEN CENTER
Rt 896,4 mi So of
Strasburg, PA
717-687-8566
C. H. LAUSCH
Ephrata, PA
717-733-3749
LAWN CARE OF PENNA,
Martmdale, PA
215-445-6650
LONG'S MOWER
SERVICE 4 SALES
Lititz, PA
717-626-8180
OBERHOLTZER'S
Lititz PA
717-733 8506
5 Factory suggested list price
pays for a specified amount
of necessary supplies before
December 31, being very
sure that the is
final and not jnk a deposit
against future needs. A
person should be ready to
show a price break, a hedge
against possible short supply
or same other economic
incentive for his purchase
The basic rule of the In
ternal Revenue Service is
that there must be a valid
business reason for making
advance purchases. And
buying ahead just to reduce
income taxes is 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 preliminary check
indicate that taxable income
will be abnormally low this
year, one may wish to defer
certain expenses until after
the first of the year. A person
R.P. WILLIAMS & SONS, INC
Columbia, PA
717-684-2019
PERRY CO.
CONRAD’S MOWER &
SAW SERVICE
Fox Hollow Rd
RDI, Box 534
Shermans Dale, PA
717-582-4437
YORK CO.
MAUSSSHARPENING
SERVICE
524 N Pershing Ave
York, PA
717-843-1716
SHEETS BROS., INC.
1061 Carlisle St
Hanover, PA 17331
717-632-3660
STRICKLERS HOME & GARDEN
Red Lion, PA
717-244-8187
WEHLER’S LAWN MOWER
3655 Admire Road
Dover, PA
717-292-3418
may also wish to advance
certain sales and calculate
depreciation on a straight
line basis.
The goal of tax
management is to even out
the peaks and valleys of
farm income, explains the
economist. Another method
of handling wide swings in
year-to-vear income is
through income averaging,
using Tax Schedule G.
Whatever one does, the
first step is to calculate
estimated taxable income. A
person shouldn’t be misled
by the fact that he feels poor
or flush, but use your
records to determine the
real facts. '
“Soil Testing”
“Personal
Recommendation”
“Precise Application”
“Crop Evaluation”
CHEMGRO
FERTILIZER CO., INC
STATE ST.. BOX 218
East Petersburg, Pa. 17520
PHONE; 717-569-3296
The economist - has
prepared a helpful fact sheet
on these and other tax
management alternatives.
For a free copy of “Tax
Management by Farmers
1977 Tax Year,” contact the'-
county Extension office in
Newark, Dover or
Georgetown. The publication
is also available by writing:
MAILROOM, Agricultural
Hall, University of
Delaware, Newark, 19711.
For those farmers who
prepare their own income
tax report, a booklet
“Farmers Tax Guide” is
also available at the county
Extension offices.
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