Many farmers and ranchers will benefit from changes brought about by the Tax Cuts and Jobs Act. Notable changes include:
Net Operating Losses:
- Can now be carried forward indefinitely;
- Are limited to 80 percent of income and
- Can be carried back for two years.
- There’s a new 20-percent qualified business income deduction for income from a trade or business, including income from pass-through entities.
- The full deduction is available to married couples filing jointly with taxable incomes below $315,000 and other filers with taxable incomes below $157,500.
Accounting method changes:
- More small business taxpayers can use the cash basis of accounting. See IRS guidance for more information.