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1 week ago | 
farmcpareport.com | Paul Neiffer
We have heard from some farmers a concern about ECAP running out of funds and that they need to get their application in ASAP. Congress authorized $10 billions of funding for this program and USDA elected to fund it at the 85% level for the initial payment. The program deadline is August 15 and soon after that date, USDA should make the final payment based on funds available.
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1 week ago | 
farmcpareport.com | Paul Neiffer
Many farmers have created Micro-Captive insurance companies over the last few years. If done properly, these companies can provide additional insurance coverage and spread the risk, especially with the rapid increase in regular property and casualty premiums and the lack of coverage. However, the IRS views many of these companies as abusive and requires taxpayers to provide certain information about the company.
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1 week ago | 
farmcpareport.com | Paul Neiffer
Just a quick post to let you know that Paul was on AgriTalk today and discussed Tax Day; a review of payments to date for ECAP; what tax changes might be coming; and my first tax audit ever (it was my parents tax return for their year of retirement). Here is a link to the show.
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1 week ago | 
farmcpareport.com | Paul Neiffer
I started preparing tax returns for a small CPA firm in Seattle while I was attending college at the University of Washington. I still remember the first partnership tax return I worked on. I got it all done and I thought it was a masterpiece of a return and handed it into the owner of the firm. His first question was “where are your workpapers”. I had no clue what a workpaper was and had to go set up the file (many who know me still say I don’t know what a workpaper is). That was clear back in 1983.
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1 week ago | 
farmcpareport.com | Paul Neiffer
In order to make the “Trump Tax Cuts” from 2017 permanent, Republicans will have to agree on how much to raise the State and Local Tax (SALT) deduction. There are many House republicans in high-tax states such as New York, New Jersey and California pushing for an increase in the deduction. They have already indicated pushback on increasing it to $25,000 as not being sufficient. However, they have also not indicated at what level they would sign off on an increase.
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2 weeks ago | 
farmcpareport.com | Paul Neiffer
The Senate passed a budget resolution last week using the “current policy baseline” approach. Under this approach making the Tax Cuts and Jobs Act permanent would be deemed to have no effect on the deficit. However, the Senate has what is called the Byrd Rules which requires that any part of the budget process can’t be extraneous and have no effect on the deficit. Therefore, since making TCJA permanent would have no effect on the deficit, Congress will likely have to tweak all parts of TCJA.
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2 weeks ago | 
farmcpareport.com | Paul Neiffer
Fortune Magazine reported that discussions are already underway with the Administration and Congress on possible tariff relief for farmers. The reason we showed apples as our photo is those farmers and similar farmers are likely the ones to be hurt most by tariffs since so much of their product is sold overseas and subje…
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2 weeks ago | 
farmcpareport.com | Paul Neiffer
The tax deadline for individual tax returns is next Tuesday April 15. Most farmers have likely filed by now, but if you need to file an extension, it is important to understand this is only an extension of time to file, not to pay the tax owed. I had a conversation with a farm family a while back and they had not realized that last year when they filed for an extension and was surprised to see a billing for interest and penalties. This Substack is reader-supported.
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2 weeks ago | 
farmcpareport.com | Paul Neiffer
Farmers historically have struggled to invest money in anything other than their farm operation. However, by investing in retirement plans including an IRA, a farmer can more easily save up for retirement and make the transfer to the next generation much easier. However, there is even another reason to make this investment. Funds in a retirement plan are fully exempt from bankruptcy and farming can be a very risky business.
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3 weeks ago | 
farmcpareport.com | Paul Neiffer
FSA continues to make updates to their Handbook 6-PL. On April 1, 2025, the released a new version of the handbook. Here is a recap of the changes:Paragraph 34 was amended to simply add ECAP. Subparagraph 258 C was amended to add ECAP. This indicates that if total payments are less than $125,000 for an entity that there will be no reduction in the payments if any person(s) with at least 50% ownership meet the requirements to provide active management or active labor.
