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| Has anyone decided to change their farming C corp to an S corp due to the new tax laws? I have been trying to get in with my CPA for a couple weeks and in the meantime trying to study this 199A deal myself. It appears that the implementation of the law may not be clear for quite some time yet. As I understand it, my C corp cannot use the 20% deduction and will be taxed at 21% going forward. The only income on my personal return (married filing jointly) is land rent, a $20000 wage to myself and I have a sizable interest deduction on a land note. So I have been able to pay a dividend of about 70K to myself while incurring no additional tax on my personal return, and keeping my corporate income at 50 to 60K. A pretty good deal in the past, but now my corp will be taxed at a little higher rate.
If I switch to an S corp I my farm income will pass through to my personal return and I will deduct 20% of my farm income minus 9% of the portion that was generated from sales to a cooperative (don't really know how this is figured since I have both cattle and grain sales) and pay at a 12% rate up to $77000. Very confusing. I hate to switch and then have the 199A deduction go away in a few years, because then a C corp would probably be better again. Does anyone feel like they have enough information to make a good decision at this time, or are we still in a wait and see mode? | |
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199A, stick with c corp or switch??
