Hello, it is Thanksgiving! I can't wait to get my fill of turkey, mashed potatoes, stuffing, pumpkin pie and succotash later today. My stomach is ready.
Today, I would like to update you on some major tax changes for 2013 and to inform you of our next oil and gas financial tax meeting.
One change that all taxpayers should be aware of is on Jan.1, 2013, the tax rates will be increasing for all Americans.
What? Didn't our candidates say they would not be raising taxes?
Actually, Congress did not vote to increase your taxes, but rather are allowing the Bush-era tax reductions enacted in 2001 to expire. Thus, higher rates will return in 2013.
When you file your federal income tax return before April 15, 2013, you're filing your taxes using the 2012 income tax brackets, so these changes will not be felt then. Instead, you will notice them on your first paycheck or monies you earn in 2013.
My biggest concern going into 2013 is not the new tax rates or payroll tax - it is the federal estate tax.
If nothing is changed, on Jan. 1, the estate tax exemption is due to drop from $5.12 million to $1 million, and the estate tax rate will jump from 35 percent to 55 percent.
This could affect hundreds of farms, small businesses and recipients of oil and gas lease payments. It is not hard for many of our farms to be valued at more than $1 million dollars. Can you afford to pay a 55 percent estate tax on the value above $1 million when a family member passes away?
This could be a nail in the coffin for many small farms trying to transition their farm to the next generation.
Speaking of taxes, we continue to sell out our workshops on the financial and tax implications of Marcellus Shale leases. During these workshops, we are discussing the 2013 tax changes and how they could impact any Marcellus Shale oil and gas leases which are being signed across the county.
Due to the overwhelming responses to the oil and gas tax meetings, I have scheduled another one for 10 a.m. to noon Dec. 8 at the Ashtabula County Extension, 39 Wall St., Jefferson. This meeting will help participants become more aware of the potential tax implications of leases and royalty payments.
The registration fee for the program is $5 per person. Pre-registration is required and space is limited by calling 440-576-9008 or visiting ashtabula.osu.edu.
Have a good and safe day!
Marrison is extension educator for agriculture and natural resources, Ohio State University Extension. He can be reached at 440-576-9008 or firstname.lastname@example.org