VanderWal says tough farm economy might result in more taxes paid
The new tax laws have varying effects on farmers, depending on how their operations are set up as a business entity.
“From a personal standpoint, I’m not sure it’s going to have a great effect, because we’re set up as a C Corporation,” said Scott VanderWal of South Dakota, vice-president of the American Farm Bureau Federation.
VanderWal’s father and uncle established the family farm business platform in the 1970s and it hasn’t changed. Some farmers may be affected by the lowest tax rate of 15 percent going to 21 percent, according to VanderWal.
“Right now, where the economy isn’t so good in farming, and if your income is pretty low, you could end up actually paying a little bit more,” VanderWal told Brownfield Ag News from his Volga, South Dakota farm, “but for the good of all, hopefully times will turn around pretty soon and we’ll be able to use those lower rates to our advantage, so that’ll be a good thing.”
VanderWal says he’s grateful that the tax plan retains the ability for farmers to deduct capital expenditures.
The new estate tax exemption, also part of the latest tax law, is now $11 million per individual, twice what it was before.
He said his farm would likely not have been affected by the lower estate tax exemption, but he says doubling it is good.
“Death,” said VanderWal, “shouldn’t be a taxable event.”