What do the words “tax return” bring to mind? For many people, fear, dread, disgust and overall dislike are the first thoughts. Accompany these feelings with the average person’s innate inclination of procrastination, and filing taxes is a recipe for a “tax nightmare.” Let me give you an example.

Farming operations require the use of a number of tools. Some tools are used continually while others, though no less valuable, are held in reserve to be used on an as-needed basis. Over the years, there has been great progress made in the design and functionality of many valuable tools. One area that has seen considerable progress is the use of electronics. Modern tractors utilize integrated computer systems with GPS technology which can allow the tractors to literally drive themselves. In recent years, there has been a paradigm shift towards smartphones and other handheld devices.

Expansion projects can create a great deal of excitement for a company. Whether the project is a new milk parlor, a hay barn, a silage pit or waste disposal system, these projects typically signify growth. While growth is exciting, it can also be a time of uncertainty. Large expansion projects generally come with large costs and questions of how those costs can be managed. In addition, they provide a number of tax planning and saving opportunities.

The cost of financial statements and tax returns is often seen as an annoying expense to meet an outside party’s requirements. However, the information contained in these documents can easily be used to calculate key ratios that can be valuable management tools when understood and used to make operating decisions. Ratios allow a dairy owner to quickly understand whether the dairy is making money and where it stands compared to prior years and industry benchmarks.

Tax law changes have been numerous in 2010, so it seems appropriate that the year closed out with one more. On December 17, 2010, President Obama signed into law the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 that includes the highly anticipated extension of the Bush-era tax cuts. There was much debate on whether the favorable individual income tax rates should be extended for everyone, or for everyone except the “rich.” Ultimately the rates in effect in recent years (10 percent, 15 percent, 25 percent, 28 percent, 33 percent, and 35 percent) will stay in effect for two years for all individual taxpayers.