Warren County Agriculture and Natural Resources

Tax Tips for 2009 Farm Returns

2010-01-28T14:57:00.001-06:00

The following are some reminders for farmers as they prepare to meet with their tax advisor.

Remember to report sales of breeding and market livestock separately. Animals used to produce milk, calves, pigs, and market livestock are cull sales not subject to Self-Employment taxes.

There are three things to note concerning depreciation:

1) Additional First-Year Depreciation or “Bonus” Depreciation - congress extended the 50% write-off of qualified 2009 depreciable asset purchases. It applies only to Original Use (New) items including machinery & equipment; fences; land improvements; single-purpose agriculture structures; general purpose shops, sheds, and barns.

2) Section 179 Expense Election - congress extended the $250,000 maximum election on qualified property placed in service 2009. It is phased out for total purchases above $800,000 and is limited to earned income (including W-2 wages and other Self Employed income).

3) Five-Year Recovery - congress requires 5-year recovery on new machinery & equipment placed in service in 2009. This applies to 2009 only. Note that used equipment still uses 7-year recovery.

Farmers may deduct prepaid expenses for feed & supplies to be used next year. The deduction is generally limited to 50% of this year’s total expense. It must be for actual feed or supplies, not merely a deposit on future purchases. There must be a business purpose for the purchase. Farm insurance must be deducted in the year it applies.

Remove insurance, utilities, fuel, and other personal expenses from farm expenses. The IRS assumes the first telephone land line is a personal expense. You may deduct itemized long-distance charges. Be sure to include farm subscriptions, utilities, and office supplies.

Farmers may elect Income Tax Averaging. It allows application of lower tax brackets from previous years to this year’s taxable income. The election may be used in the current year even if it does not reduce this year’s tax liability. Do this to create an opportunity for reducing taxes in some later year. Ask your tax preparer if Farm Income Tax Averaging will work for you.

Publication 225, Farmers Tax Guide, should be available at your County Extension office or on-line at www.irs.gov. The publication is written for farmers by the IRS with input from Extension Farm Tax Specialists from around the country.

Concerning Forms W-2 and 1099: Social Security Number and current address are required for employees, contractors, and landlords. Get the information before you make the payment. Form I-9 is required within the first week of employment. Report new hires to Kentucky New Hire Reporting within 20 days.

Farmers are required to file Form 1099-MISC to report payments of $600 or more for rent and services. The form requires address and SSN of recipient. There is a $100 failure-to-file penalty for each form not filed. Form 1099 is not required for payments to corporations. Contact Jerry Pierce at jerry.pierce@uky.edu with questions. (Jerry Pierce)

Poison Hemlock: A Slow Arriving Issue for Kentucky Farmers

2009-06-22T13:47:00.002-05:00

Poison Hemlock, one of the most toxic plants in the world, has made its way across the borders, into the United States and is slowly emerging as a concern for our local farmers. This poisonous plant has typically been seen along roadways, abandoned lots, fence rows, and other non cropland sites. However, it has been known to have spread into many pasture lands and hay fields.

Why would this be a concern for us? The main reason is because all livestock animals are known to be affected by this plant. Animals will be more likely to eat these plants in the late winter when green plants are hard to find. When animals ingest more than .2-.5% of the animal’s body weight, results could be lethal and even deadly. Symptoms in animals are usually between 30 minute to 2 hours after the animal ingested the plant and symptoms could include nervousness, trembling, muscular weakness, loss of coordination, and dilation of pupils, coma and eventually death. Pregnant animals that ingest this could also result in a deformation of the fetus.

Best ways to control Poison Hemlock is to kill it before it ever seeds. This can sometimes be a difficult task due to the fact that this plant can produce between 35,000 – 40,000 seeds. After plants have produced flowers it is too late to apply a herbicide, but it is not too late to try other control methods. These methods include mowing or cutting down individual plants. Late fall or early spring are ideal times for herbicide treatment.

Late Planted Corn Causes for Hire Risk Corn Borer

2009-05-18T15:26:00.003-05:00

The wet spring weather has caused for many farmers to be later than usual on getting their corn in the ground. Corn yield tends to decrease in crops planted after May 15 of each year. Not only does yield tend to decrease, but also the risk for Corn Borers tends to increase. Comparison of risk of an outbreak of Corn Borers between crops planted before and after May 10 is quite substantial. Losses tend to be significant in those crops planted after May 10.

Corn planted after May 10 is still at risk of being attacked by Corn Borers, but these areas tend to escape the worst of the damage. Early planning of corn management should be evaluated at an early stage in attempts of planning for possible threats such as these.

Pictures from: Ric Bessin

Ways to minimize the threats of Corn Borers could be to harvest the crop earlier than planned. There are several insecticides that have been proven to be affective on the fight against these crop killers. Pro active solutions could be that of planting Bt Corn which is a practical control for late planted corn. Corn Borer hybrids are also proven to provide excellent protection from Corn Borers along with some other pests. Stacked hybrids have also been proven to provide excellent born borer control.

Bessin, Ric. "A Wet Spring, Delayed Planting and Corn Borers" Kentucky Pest News (2009): 1-11. Kentucky Pest News. 11 May 2009. UK Cooperative Extension. 15 May 2009 .

Wheat Health Outcome of Weather: Good health here to stay?

2009-05-18T11:36:00.000-05:00

This season of wheat has turned out to be one of the best growing seasons with minimal disease that Kentucky has seen in years. Soil born viruses were minimal and the Insect/mite viruses are also expected to be of minimal occurrence. The decrease in the number of acres affected by fungal disease are said to be in compliments of the cooler than normal conditions along with the excellent management practices of wheat farmers across the state.

However the long awaited spell of rain that just occurred across the state is expected to regress these unusually low numbers of infected crops. Many fields were left completely unprotected or those that did get sprayed were not sprayed at the proper time for peak effectiveness of the product used. Most of the wheat crop was at the flowering stage during the hit of this wet spell. Wheat is most susceptible to infection during its flowering period, which also attributes to the expected increase in infection.

Many are questioning whether or not to go ahead and spray the crops that have already flowered now that the wet spell is coming to a close. This is not recommended due to the fact that most fungicides are not recommended for this late, and if applied would not have an outcome of very noticeable or effective results. However for those crops that are still in the flowering stage, research should be done on the fungicide used, and positive results are possible from spraying on these plants.

Hershman, Don. “Wheat Disease Update” Kentucky Pest News (2009): 1-11. Kentucky Pest News. 11 May 2009. UK Cooperative Extension. 15 May 2009 .

Armyworm Caterpillars Affect The State

2009-05-18T11:14:00.009-05:00

The threat of Armyworms across the state of Kentucky has not quite had the major outbreak as assumed in many areas. Test plots have proven this to be true, but without proper means of analyzing the data some data is left under assumption. Though the outbreak has not been major, this does not mean that there will not be any problems across the state relating to armyworms.

Just like in previous years, Armyworm caterpillars could be found in susceptible hosts. Armyworm caterpillars are greenish-brown and have stripes down their back and sides. Armyworms are hard to find during the day due to the fact that they tend to avoid direct sunlight and are best found by tracking the damage of the plants from where they had been. Locations warmer than those where the traps are (Princeton, Lexington, etc.) will be under a greater risk for an earlier outbreak of armyworm caterpillars.

Populations of armyworms do better in cooler wet climates such as those in Western Kentucky. Grass forages and corn tend to suffer the most from these creatures. However evidence has been found of armyworm caterpillars feeding on heads of wheat. If this problem is familiar to you, insecticide recommendations can be found at: http://pest.ca.uky.edu/EXT/Recs/welcomerecs.html

Picture From: Lee Townsend

Johnson, Douglas. "Armyworm Flight 2009: No consistent Story; but there will be Caterpillars!" Kentucky Pest News (2009): 1-11. Kentucky Pest News. 11 May 2009. UK Cooperative Extension. 15 May 2009 .

SWINE FLU / (H1N1)

2009-05-04T08:24:00.000-05:00

The name swine flue is not accurate and it's causing unnecessary problems and concerns, according to the U.S. Department of Homeland Security and USDA.

Homeland Security officials announced that the virus name would be changed to the Influenza A (H1N1) virus. Specifically, Janet Napolitano, Homeland Security secretary, has repeatedly and pointedly referred to the new strain, and outbreak, as H1N1. USDA Secretary Vilsack also is recommending the name changed to eliminate the public confusion about this illness and to more accurately characterize it as a human-to-human transmitted virus.

The problem, the agencies point out is that the name "swine flu" implies a problem with pork products and the swine herd. So far, this new variant of H1N1 influenza has not been identified in any North American swine.
The Centers for Disease Control and Prevention reports that it has not found any evidence to indicate that any of the illnesses resulted from contact with pigs. Furthermore, influenza is a respiratory health issue and is in no way transmissible via food products. The virus has a short life span and is very sensitive to drying and heat.

Vilsack said at a news briefing today that he is concerned that misunderstandings could have a negative impact on U.S. farmers who supply pork products to people around the world. He emphasized that the U.S. pork industry is sound and that consumers everywhere should know that U.S. pork products are safe.

Excerted from Drovers.com

For more information on H1N1 Influenza visit the following webaddress: