Introduction It’s that time of year again…tax time. Many farmers have already filed March 1, others will file by May 17 (the normal filing date of April 15 was recently pushed back by the Internal Revenue Service). Whether you’ve already filed, reviewing your return or have yet to receive all your tax documents, there are often many questions as to which income items are taxable and how they are taxed. This blog post is going to review some unique income items for 2020, different types of income and how they are taxed. We will start by discussing three of [...]

Introduction So far in this blog series we’ve discussed setting your business up for payroll, calculating a paycheck, the difference between pre- and post-tax deductions, and how to calculate withholdings. In this blog post, we will discuss the frequency of payroll tax deposits, calculating payroll tax deposits, and payroll tax reporting. When to Deposit Payroll Taxes The frequency of depositing payroll taxes is dependent on what kind of labor you have and the amount of your annual tax liability. Table 1 summarizes how often tax deposits have to be made. Annual agriculture deposits are made with Form 943 (discussed [...]

Introduction So far in our payroll series, we have discussed how to prepare your business for payroll, how to calculate a paycheck, what the differences between pre- and post-tax deductions are and unemployment taxes. In this blog post, we are going to discuss how to calculate withholdings from an employee’s paycheck. There are three main taxes to withhold: FICA, Federal and State. FICA Tax FICA (Federal Insurance Contributions Act) Tax is comprised of two parts: Social Security and Medicare. The total FICA tax is 15.3% (12.4% to Social Security and 2.9% to Medicare).  All taxpayers must pay the tax [...]

In an earlier blog post, we discussed how to set your business up for payroll. Once your business is setup for payroll, the next step is to figure and write the employee’s paycheck. This blog post will cover pay period options and how to calculate paychecks. Pay Periods and Gross Wages The business will have to decide the frequency of which employees will be paid; Table 1 outlines some of the options, definitions, and number of pay periods per year. Table 1: Summary of Pay Periods Once the business has determined the pay period, they need to determine how [...]

As farm families across the Midwest get busier each year, the need for part-time, hired help becomes prevalent.  However, it’s not as easy as simply writing them a check every week.  We need to ensure the proper steps are completed before beginning to pay an employee as well as continued compliance and reporting once the employee relationship is established. This article discusses the necessary steps to set your business up for payroll. Employee or Contract Labor? The first step is to determine if you are hiring an employee or if you are hiring contract labor. There are three general [...]

By Emily Carls and Jessie Shoopman The two most common topics of producers are weather and prices. Both are vital to the success of an operation, but are also the most unpredictable part of a farming operation. Knowing the right time to sell grain and how much to sell can be stressful and frustrating. One way to minimize the risk in marketing grain is to know your breakeven price, or the price needed to generate enough revenue to cover all of the costs of production. Knowing your breakeven can help take some of the emotion out of marketing grain. [...]