Tax Planning

[wade]

What do people think that the % of probability of taxes going up in the future?

[Hopperbin]

I would say say corporate taxes go down or stay the same to keep jobs in the country.
Personal taxes have no where to go but up.

[Hopperbin]

Having the corporation is very handy.
You can pay yourself an average wage one that you think is OK in the long term. If you are building up the farm and don't need all the wage you give the farm an interest free share holder loan, to be paid back at anytime in the future.
The corporate tax does not increase untill you get above 400,000 profit. For that reason I purchase no inputs for the next years ever and don't defer grain tickets because I am under 400,000 profit. That way I have the option of using extra inputs or defered grain sales in a year I would be over. Purhaps just wishfull thinking but when the grain prices rocketted up this year anything can happen.

[Hopperbin]

Actually there is a small benefit (2-3%) in going to $500,000 in 2008 because of the way the eligible dividend rules are applied and the tax intergration rates when converted to personal. Hopperbin, I would expect that if you are approaching the $400,000 limit that a good accountant would have advised you fully on this small, yet significant advantage.