Farm & Ranch Taxes: 2017 Changes Back »

Courtesy: Internal Revenue Service

Written collaboratively by Shannon Sand and Jack Davis.

Tax rules and regulations change annually, so it is important for producers and tax professionals to stay up to date. For 2017 there have been some changes to the farmers and ranchers tax guide. This article will highlight the majority of the updates. For greater depth, producers and tax professionals should view IRS Publication 225: Farmer's Tax Guide.

2017 Updates

  • Disaster relief for Hurricanes Harvey, Irma, and Maria.
    A new section D has been added to form 4684 to make an election to deduct a loss attributable to a federally declared disaster in the tax year immediately before the disaster year.
  • Standard mileage rates.
    Standard mileage rates for operating motor vehicles has changed to 53.5 cents per mile.
  • Increased section 179 deduction limits.
    There has been an increase to the section 179 expense deduction dollar limits. The maximum amount a person can choose to deduct for most 179 property put into service in 2017 is $510,000 (where as in 2016 it was $500,000).
  • Maximum net earnings for Social Security & Medicare.
    The maximum net self-employment earnings subject to the social security part of the self-employment tax (6.2%) is $127,200. There is no maximum limit on earning subject to the Medicare part of the tax.
  • Qualified small business payroll tax credit for increasing research activities.
    For tax years following December 31, 2015, a qualified small business may elect to claim up to $250,000 of its credit for increasing research activities as a payroll tax credit against the employer’s share of social security tax in the first calendar quarter beginning after the date that qualified small business filed its income tax return.


Both paper and electronically filed W-2 and W-3 forms must have been filed with the Social Security administration by January 31, 2018. Both paper and electronic files of 1099-MISC that report non-employee compensation must have been filed with the IRS by January 31, 2018.

In Summary

These changes to the tax rules and regulations for 2017 can have some significant impacts on a producer’s ability to plan for the next year and beyond. One of the most significant changes was the 179 deduction expense that allows for producers to deduct up to $510,000 of applicable property when put into service in 2017. Given the changes in the commodity markets in the last couple of years it will be especially important for producers and their accountants to work together and create a tax plan that fits each producer’s individual needs.

Additional Resources

For more information about tax rules, see the following resources:

Disclaimer: The information in this article is believed to be reliable and correct. However, no guarantee or warranty is provided for its accuracy or completeness. This information is provided exclusively for educational purposes and any action or inaction or decisions made as the result of reading this material is solely the responsibility of readers. The author(s) and South Dakota State University disclaim any responsibility for loss associated with the use of this information.

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