The other significant impending change to the federal tax code involves Section 179, which according to Marrison, works somewhat similarly to the bonus depreciation allowance.

I.R.C. § 179 expensing allows farmers to elect to deduct part or all of the cost of qualifying farm assets in the year they are placed in service. Under current law, the dollar limit is $500,000 for 2011, $125,000 in 2012, and $25,000 in 2013 and beyond. Both new and used equipment is eligible for this deduction.

“You’re able to deduct a qualifying farm asset, basically a piece of equipment that is new to a farmer,” Marrison said. “It doesn’t have to be new equipment as with the bonus depreciation, so this provision applies to used equipment purchases, too. The two allowances work hand in hand.”

He said December is a key month for farmers as they finish harvest and consider last-minute strategies to manage potential tax liabilities. The Ohio Ag Manager newsletter is one resource to help understand potential opportunities, as well as impending changes to the tax code.

“This has been happening a lot in the past few weeks, because with the delayed harvest we’ve had less time,” Marrison explained. “The Ohio Ag Manager puts a number of tax-related articles out throughout the year. We would also highly recommend getting a copy of the Farmers’ Tax Guide from your local Extension office.”

Marrison said the Tax Guide gives the latest information on what’s new for 2011 and what may be new for 2012. The 2012 edition is now available, and Marrison said OSU Extension educators will have copies available in each local Extension office in the coming days.

The Ohio Ag Manager newsletter is published in collaboration by OSU Extension educators and faculty members of the Department of Agricultural, Environmental and Development Economics.