Changes to FSA AGI Purposes on Section 179

CliftonAllenLarson principle and Farm CPA Today blogger Paul Neiffer shares some good news about an update to the handbook of USDA's Farm Service Agency when it comes to considering Section 179 deductions.

Neiffer: "We have some good news for our farmers out there. The FSA was dis-allowing Section 179 in arriving at Adjusted Gross Income. Farmers if their average Adjusted Gross Income over a three-year period is greater than $900,000 they're not allowed to get any payments from FSA: ARC, PLC etc. Since they were dis-allowing Section 179, many of our farmers out there — let's say three or four brothers farm together and they had income before Section 179 of $902,000 but they had Section 179 of $500,000. That would bring their net income down to $400,000 and the FSA was dis-allowing it. Via a couple of appeal processes with the FSA that I was involved in, we were able to convinced them that Section 179 should be allowed for all entities. On January 11th, they updated their handbook that deal with this. So any farmers out there were dis-allowed a payment due solely to Section 179, they should talk to their local FSA office and try to get a refund on that."