by Paul Neiffer as it appeared in AgWeb.com
The Trump tax cuts, officially known as the Tax Cuts and Jobs Act (TCJA) of 2017, have been a topic of significant debate since their inception. It appears the Republicans might have enough political capital to both extend the TCJA and enact additional tax cuts that could help farmers.
The major tax cuts that have helped farmers since 2017 include (but not limited to):
*Reduction in most tax rates
*100% bonus depreciation through 2022
*Section 199A 20% net deduction on farm income
*Doubling the estate tax exemption (currently $13.99 million)
*Increasing the child tax credit to $2,000
However, there were also some provisions that penalized many farmers:
*Limiting the state and local tax (SALT) deduction to $10,000
*Eliminating the tax-free treatment of equipment trades
Reducing 100% bonus depreciation (there will be none starting in 2027)
*Dropping the corporate tax rate to 21% (most farmers paid 15%, so this was a 40% tax increase)
The House Republicans passed a budget bill to allow income taxes to rise by $4.5 trillion over 10 years. The Senate is proposing to ignore the budget effect of making the Trump tax cuts permanent, and the House could go along with this proposal.
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