FARMFINANCE By Monty Smith Money matters Preparing early for tax filing season could put more money in your pocket in the long term lthough tax filing deadline is still a few months away, now is a good time to review your tax planning strategies with your accountant to minimize the impact of income taxes in the long term. There are two primary accounting methods for calculating taxable income—cash and accrual basis. When you use the cash method, you report income when it is received, and claim deductions when expenses are paid. The accrual method lets you report income when it is earned and claim deductions when expenses are owed. You can report your farming income using the cash method or the accrual method of accounting. Most farmers file their tax returns using the cash method to report farm income and expenses, and use the accrual method for preparing annual financial statements for their financial institution or for management You can reduce your taxes further by claiming depreciation on equipment, buildings and market quota. 22 | November 2009 | MilkPRODUCER
Table of Contents for the Digital Edition of The Milk Producer - November 2009