Paul NeifferThe Farm CPA Blogger

Paul Neiffer is an agribusiness CPA and business adviser and specializes in income taxation and accounting services specific to the farm community. This includes succession planning issues and opportunities related to taxes and compliance. Paul writes a monthly tax column for Top Producer and blogs at AgWeb.com. He was raised on a dryland wheat and pea farm in Washington. He recently purchased a 185-acre farm. Driving his cousin’s combine is his idea of a vacation.
Paul Neiffer is an agribusiness CPA and business adviser and specializes in income taxation and accounting services specific to the farm community. This includes succession planning issues and opportunities related to taxes and compliance. Paul writes a monthly tax column for Top Producer and blogs at AgWeb.com. He was raised on a dryland wheat and pea farm in Washington. He recently purchased a 185-acre farm. Driving his cousin’s combine is his idea of a vacation.

Articles By Paul Neiffer

Feb 13, 2019

An Interesting Way to Allocate SE Tax Deduction

It has been brought to our attention that the final regulations dealing with deducting SE tax deduction and retirement plan contributions might be considered a little "interesting" by most tax professionals. The final regulations are quoted as follows: 1.199A-3(b)(1)(vi) Other Deductions. Generally, deductions attributable to a trade or business are
Feb 12, 2019

The Deductions Aren't in the Proposed Regulations

We got the following comment on the blog and several similar emails: Are you going to rely on the proposed regs. when it comes to reducing QBI by these items (SE tax and health insurance deduction and retirement plan contributions)? The reader is stating that the proposed regulation did not
Feb 11, 2019

What About the SE Tax Deduction?

In a couple of earlier posts, we had indicated that you need to reduce your Qualified Business Income (QBI) by the related self-employed (SE) tax deduction. This is fairly easy when there is only one business and no sales to a cooperative before its fiscal year-end. What happens when a
Feb 10, 2019

Processing and Marketing Cooperatives Provide An Extra Deduction

One quick note before we dive into the regular part of this post. We continue to get lots of emails and comments regarding the calculation of the Section 199A deduction for patrons who are under the threshold. IMPORTANT - You have to do the cooperative "reduction" calculation no matter your
Feb 07, 2019

Be Careful of Processing Cooperatives

As we have posted previously, farmers who deal with a cooperative in 2018 likely have three buckets of income . For farmers who sell to a marketing cooperative (most grain farmers), this is fairly straight-forward. Bucket #1 includes all of the payments received from the cooperative before the cooperatives 2018
Feb 04, 2019

Transition DPAD from a Cooperative

We have gotten numerous emails regarding the Form 1099-PATR that farmers have received from cooperatives over the last few days. Box 6 of the Form 1099-PATR shows the amount of Domestic Production Activities Deduction (DPAD) that the cooperative has elected to pass through to the patron. In almost all cases,
Feb 01, 2019

What About Cooperative Transition Rule

Farmers who sell grain or other farm commodities to a cooperative with a fiscal year ending sometime in 2018 are required to do an extra calculation in arriving at their 2018 QBI deduction. This extra step is only for 2018. Starting in 2019, the farmer will calculate the QBI deduction
Jan 29, 2019

What to Deduct For QBI

The Final Regulations indicated that farmers (and other taxpayers) will need to reduce Qualified Business Income (QBI) for certain deductions reported on the tax return that are not specifically paid by the business. These include the deduction for half of the self-employment tax, the self-employed health insurance deduction, and retirement
Jan 21, 2019

Common Ownership = No Hours Required!

We had a reader send in the following comment: "It sounds like bringing a rental to the level of trade or business (the 250 hours) would make it subject to SE tax in all cases except the common control scenario? Specifically, we have land held outside the operating entities, either