My neighbors spend a lot of time each November deciding whether to buy new equipment before, or after the New Year. Since the full value of a capital purchase is assigned to the financial year it is made, the timing of the purchase can have a significant impact in reducing tax liability. In order to know whether it will be better for your tax position to buy before or after your New Year’s party, you’ll need to have a rough idea of how the current year is looking and what you might expect for next year. A visit to your tax accountant in November can help you sift through some of the numbers in time to make capital purchase decisions.
MOSES friend Paul Dietmann of Badgerland Financial wrote a great article in the current issue of the Organic Broadcaster titled “Ten Tune-Up Tips for Your Farm Business” offering more details on this and other end of the year suggestions.
Anyone wanting more in-depth understanding of farm financial management will want to attend one of our 2-day workshops, Fearless Farm Finances, coming up soon- Nov. 15-16 in La Crosse, Wis. and Dec. 6-7 in East Troy, Wis. More information is available here.
Jody Padgham is the Financial Director for MOSES, and Editor of Fearless Farm Finances.