With the start of the New Year, more than 50 tax provisions, many of which are important to farmers and ranchers, will expire. These provisions are also known as "extenders," because they have been prolonged several times beyond their original expirations.
According to the American Farm Bureau Federation (AFBF), the provision related to small business expensing is critical to farmers and ranchers. When purchasing business assets, the maximum amount that a small business can immediately expense will drop from $500,000 to $25,000 on Jan. 1.
The House Ways and Means Committee proposed a $250,000 expensing limit as part of the tax reform proposals, and the Senate recommended a one-year extension of current legislation followed by a $1 million limit.
Time is running out on bonus depreciation, provisions relating to farmer-supported renewable fuels, food donation and farmland preservation incentives, as well as deductions for state and local sales tax and tuition and fees for higher education.