Financial Conversations with Fitz #89 - Tax Thoughts and Year End Cash Flow Planning - 12/22/2010
Good weekend of Iowa Winter. Weather about as variable as the markets both for Ag and the Dow. It is definitely time to review taxes and cash flow in the next week.
The new tax bill changed lots of things for our last week of planning. The software companies will be scrambling to update their programs for the tax year since the bill was passed. There are so many points of Expiration and now extension or reinstating of old tax law that there is a separate section in our tax planning book on just that. So it is important that you get in to visit with your tax preparer before year end if you have any unusual questions on your personal situation. If you have sold much grain you may want to be sure to review where your AGI is going to be at. Also check out starting an IRA or Keough for this year. You only have a week to do a Keough tax deferral. The IRA you can do into the next year. Call us for clarification. What better way for you and your wife to delay paying taxes on a possible $10,000 and still keep the money in your name. Can go as high as $12,000 if you are over 50.
Another area you should check on is your current cash flow for year end and your first quarter of 2011. If you don’t have your own system set up you can stop in and visit with our loan officers at TSB and run a quick short one on Excel Program. You have two different situations that are important. One of course is the tax filing that you can’t change after the 31st. The other is your loans and insurance. Be sure you have the coverages you want on your grain depending on if it is yours or someone elses’ and stored or a contract to deliver by March 1st. I know most farmers figure that nothing will happen to a grain bin but we now have a very expensive item out in our yards. Just a thought…..
You have done a great job by producing now follow thru and protect it and market it efficiently.
Have a great Christmas!