The Enid News and Eagle, Enid, OK


January 26, 2013

Tax bill has ag impact

ENID, Okla. — The Taxpayer Relief Act extended and, in some cases, made permanent a variety of expiring income tax provisions.

Many of the extensions will impact agricultural producers. This article discusses some of the major items that will directly affect farmers and ranchers.

The bill made permanent the 2012 ordinary income tax rates of 10, 15, 25, 28, 33, and 35 percent and added a new top rate of 39.6 percent applicable for 2013 and beyond. The 39.6 percent rate will impact single filing taxpayers making more than $400,000 and impact married filing joint taxpayers making more than $450,000.

Long-term capital gains rates for non-corporate taxpayers also were made permanent, and a new top rate was added for tax years beginning after Dec. 31, 2012.

The capital gain rates are zero percent for taxpayers in the 10 and 15 percent marginal tax brackets, 15 percent for taxpayers in the 25 through 35 percent marginal tax brackets, and 20 percent for taxpayers in the 39.6 percent marginal tax bracket.

In addition, the tax treatment for qualified dividends was retained. They will be taxed at the same rates as long-term capital gain. Qualified dividends will be taxed at zero percent for taxpayers in the 10 and 15 percent marginal tax brackets, 15 percent for taxpayers in the 25 through 35 percent marginal tax brackets, and 20 percent for taxpayers in the 39.6 percent marginal tax bracket.

The 2.0 percent temporary payroll tax cut that was extended for the 2012 tax year was not extended for tax years beginning after Dec. 31, 2012. This cut reduced the amount of the self-employment tax as well as the employee portion of the payroll tax by 2 percent for 2012.

The special 50 percent bonus depreciation will continue to be in effect for 2013. To qualify for bonus depreciation, new depreciable property must be purchased and placed in service before January 1, 2014.

In addition, the Section 179 expensing amount has been reinstated at the $250,000 for both the 2012 and the 2013 tax year.

This provision applies to either new or used business property purchased and placed in service in 2012 or 2013. The investment limit also was increased to $500,000 for these tax years.

The act also has indexed the alternative minimum tax exemption amounts to the rate of inflation as well.

In the past several years the exemption amounts have had to be adjusted annually through federal legislation to minimize the negative impact on taxpayers.

The act has adjusted the exemptions for 2012 and will index those amounts in future years.

For additional information concerning these and other tax items contained in the Taxpayer Relief Act of 2012, be sure to consult with your tax preparer or adviser.

Hobbs is Oklahoma Cooperative Extension Service assistant extension specialist.

Text Only
  • Jeff Bedwell Consider safety of forage beforehand

    Drought conditions of the past three to four years and in particular the past eight months had hay/forage inventories at critically low levels. The most recent period ranked as the third-driest period in recorded history. Not unlike the farmers and ranchers of other times of drought, ag producers now have been very resourceful to not only replace hay supplies that have dwindled but also add much-needed revenue to farm income.

    July 19, 2014 1 Photo

  • Right to Farm web 1.jpg Ag industry seeks right to farm

    The emerging battle could have lasting repercussions for the nation’s food supply and for the millions of people worldwide who depend on U.S. agricultural exports. It’s also possible the right-to-farm idea could sputter as a merely symbolic gesture that carries little practical effect beyond driving up voter turnout in local elections.

    July 19, 2014 2 Photos

  • farm - Burlington FFA web.jpg Burlington students attend camp

    More than 1,600 FFA members from 289 Oklahoma FFA chapters attended one of four three and one-half day sessions from June 29-July 12.

    July 19, 2014 1 Photo

  • farm - Oklahoma's Dirty Dozen poster 150dpi_W.jpg Poster targets invasive plants

    They all have more than four letters, but they are certainly bad words in the state of Oklahoma.

    July 12, 2014 1 Photo

  • farm - Rick Nelson web.jpg Simple steps can prevent fungus infection

    July 12, 2014 1 Photo

  • Help plants survive the summer heat

    The July hot weather has arrived, and Oklahoma State University has some suggestions for helping with our gardening needs this month.

    July 12, 2014

  • farm - 4-H_W_W.jpg State 4-H honors volunteers

    A group of dedicated parents and volunteers with Oklahoma 4-H Youth Development Program gathered recently in Stillwater for learning, sharing of ideas and recognition of dedication to Oklahoma’s youth.

    July 12, 2014 1 Photo

  • Danna Zook cutout web.jpg Water quality important for livestock

    Even though many areas have been blessed with ample rain this past month, we must not brush aside issues resulting from the evident drought.

    June 28, 2014 1 Photo

  • Farm Poisoni_Hass web.jpg Poison tested to control hogs: Preservative used to cure bacon may be key to problem

    Hunting and trapping won’t do the trick for these big, wildly prolific animals. So, the U.S. Department of Agriculture kicked off a $20 million program this year to control feral swine, which have spread from 17 states in 1982 to 39 now.

    June 28, 2014 2 Photos

  • farm  - Junior Beef Ambassadors web.jpg Area youth place in beef ambassador contest

    Cash prizes were given to the top three contestants in each age division.

    June 28, 2014 2 Photos

Featured Ads