Funded by the Illinois Soybean Association checkoff program.

Business Operations

Pandemic-Induced Supply Chain Issues Still Prevalent

The past 14 months have been extremely tough on all of us. What started as “Two Weeks to Flatten the Curve,” stretched into over a year of unprecedented government lockdowns and restrictions. Thankfully, we have watched the marvels of modern science develop, implement, and roll out a vaccine faster than ever before. Here in mid-May, we are seeing much of the United States open back up or at least being scheduled to open with restrictions lifted. As full of uncertainty as 2020 was, we were fortunate enough to begin the season with fully stocked pipelines of products. In many [...]

By |May 17, 2021|

Deciphering Types of Income

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 [...]

By |April 20, 2021|

Retirement Plans for Farm Operators

While 2020 was a challenging year in many ways, farm incomes were relatively strong in parts of the Midwest. These income levels often give rise to a search for a tax deferred retirement plan. There are several options available, however, the retirement plan space can be very complex. The following is a synopsis of some of the more common retirement plan options followed by a table that outlines the characteristics of each type of plan. Individual Retirement Account - IRA IRAs are the least complex and most versatile.  The deduction is limited to the lesser of wages plus net [...]

By |March 15, 2021|

What You Need to Know About Hiring Workers: Tax Deposits and Reporting

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 [...]

By |February 1, 2021|

What You Need to Know About Hiring Workers: Calculating Withholdings

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 [...]

By |February 1, 2021|

What You Need to Know About Hiring Workers: Calculating a Paycheck

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 [...]

By |January 15, 2021|

What You Need to Know About Hiring Workers: How to Start Your Business on Payroll

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 |January 5, 2021|

Building a Successful Soybean Budget

Farming in the modern era is a skill that must balance biology and agronomy with cost and markets. Thus, it’s important to understand what the top influencing factors are for raising high-yielding soybeans. Once you know the factors, you can balance them with the current market. Like any budget, it’s important to separate cost into fixed and variable. Fixed costs: Seed, crop insurance, herbicides, fertilizers, land payments Variable costs: Storage, trucking, labor, fuel, parts Fixed to Variable: Seed Replant: Understand service policy and try to get 100% replant to move this into the fixed cost category. Overseeding: It’s important [...]

By |December 30, 2020|
Go to Top