Funded by the Illinois Soybean Association checkoff program.

FARM MANAGEMENT

PCM Financial Analysis of Tillage Operations for Soybean Production

We’re excited to introduce ILSoyAdvisor readers to Precision Conservation Management (PCM). PCM is a farmer service program in Illinois and Kentucky that helps farmers scale use of conservation practices like reduced tillage, nutrient management and cover crops in a way that focuses on impact to farm income. PCM was launched by the IL Corn Growers Association in 2015 and has grown rapidly, now serving around 350 farmers and representing over 300,000 acres of farmland in Illinois. Following the exciting announcement that the Illinois Soybean Association is joining IL Corn Growers as joint partners in PCM, this seems like a [...]

By |January 8, 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|

What Should My Adjusted Gross Income Be?

Each year taxpayers have the opportunity to work with their tax preparer to craft a year-end tax plan that provides a desired tax liability. Taxpayers may use current tax legislation to lower or raise taxable income by claiming more or less taxable income during the current tax year. While working through tax planning decisions, taxpayers may wonder “What should my adjusted gross income be?” This article discusses adjusted gross income and identifiable signals which answer that question. What is Adjusted Gross Income? Individual income tax returns have changed a bit over the past several years; not only in how [...]

By |December 20, 2020|

End of Year Deadlines at the FSA Office

For most, the 2020 harvest has come to an end and now it’s time to quickly complete all the year-end tasks. It’s important to remember that between now and the end of the year there are very few open days of business for the county FSA offices, so be proactive and address any needs sooner rather than later. I recently had the opportunity to visit with FSA State Executive Director William Graff. During our conversation, I learned about upcoming FSA deadlines and the importance of updating FSA farm records. We both agreed that with the holiday season upon us [...]

By |December 11, 2020|

Depreciation: Starting with the Basics

Depreciation is a term you’ve probably heard your accountant use fairly often; understanding its full meaning and financial implications is important to make strategic management decisions. The concept of depreciation is not as daunting as one would think. This article will provide details to give you more confidence when discussing and selecting depreciation for your operation. An Example – Tractor Purchase When you purchase a tractor (or other depreciable property), it starts to lose value as it ages. When the tractor is sold, it likely brings less in return than the original purchase price. Depreciation is a way to [...]

By |December 8, 2020|

5 Things to Have Ready for Your Year End Appointment with Your Accountant

And just like that, we have found ourselves at the end of another year. 2020 has brought its own set of challenges and opportunities to farm families across the nation, so let’s look at five things to have ready before going to your accountant's office for your year-end visit: 1. A tax plan – This is not something you can prepare the night before your meeting. This is something that needs to be completed well before the end of the year. I always suggest meeting with your tax preparer in November or early December (or at least a month [...]

By |November 23, 2020|

The Bottleneck

Now that harvest is over, all of the bushels will soon be accurately counted and from the profit capital investment can be purchased. Regardless of your farm’s size or how much money is in your checking account, you are the CEO and president of your company and your farm. It is 100% up to you to make sound agronomic decisions, but to also make good, sound financial decisions. Several years ago I was talking with a family member who farms, and they were telling me how they just got done with harvest and were thinking about buying a new, [...]

By |November 15, 2020|

Steps to Creating an Entity

There are many reasons individuals decide to formalize their operation into a business entity. A variety of entity structures are available for business owners to use to accomplish the goals/objectives of their operation. Some operators use an informal operating joint venture instead of a formalized entity. Tax and transition planning are some of the most common goals of an entity. However, it is important to not only consider the tax implications but also keep in mind the overarching goals and strategic plan for your entity. Common Entity Types  1. General Partnership 2. Limited Liability Partnership (LLC/LLLP) 3. Corporation • [...]

By |November 6, 2020|
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