TIME TO REVIEW

Before celebrating the new year, take time for a last-minute review of your income tax strategies for 2023.

-  Dan Looker

Current rules have few of the complex but generous provisions of laws passed during the COVID-19 pandemic.

"It's back to more normal," says Kristine Tidgren, director of Iowa State University's Center for Agricultural Law and Taxation. It also could be a calm before big changes.

At the end of 2025, many of the provisions from the Tax Cuts and Jobs Act of 2017 expire. Unless Congress acts, income tax rates will rise, key deductions will go away, and the estate and gift tax exclusion will drop from almost $13 million now to an estimated $7 million, depending on inflation.

Before worrying about that, however, Tidgren, a national authority on ag tax law, recommends running these timely issues by your tax adviser.

First, thanks to cash accounting allowed to farmers, you have time-honored ways to shift expenses and income from one year to the next.

If you've had a good year, you can prepay expenses. Not so great? With a deferred payment grain sales contract, "you can choose to pull income back into 2023," she says. It's a decision you make when you file your return.

Also, as late as April 15, you can contribute to an individual retirement account.