Gordon Groover (firstname.lastname@example.org), Extension Economist, Farm Management, Department of Agricultural and Applied Economics, Virginia Tech
Farm business managers should consider putting the following activities on their management calendar this winter.
- Get your farm’s 2015 financial records closed out: Post all income and expenses paid during 2015 in your record book or accounting software. You still have time to conduct an end-of-the-year inventory of all the farm assets and liabilities to provide data for the farm’s net worth statement.
- Need another copy of the Farm Record Book: Annual Expenses and Receipts, Virginia Cooperative Extension publication 446-017? Then print the order form at https://pubs.ext.vt.edu/446/446-017/446-017.html. The price is $12.00.
- Use your 2015 records to develop an itemized list of income and expenses. The categories found on the IRS Schedule F can serve as a starting point for estimating net income for the farm business. Compare your results to previous years, looking for both weaknesses and strengths.
- Seek assistance from Virginia Cooperative Extension’s farm business management agents, lenders, or your accountant to develop a detailed financial analysis of your farm business, including the major 21 financial ratios. These ratios and a detailed financial analysis can be generated by using the Center for Farm Financial Management (cffm.umn.edu/) program FINAN (www.cffm.umn.edu/FINPACK/default.aspx). FINAN and other computer programs can be purchased annually for approximately $149 or the whole analysis and planning package of three computer programs for $395. Details are at www.cffm.umn.edu/FINPACK/default.aspx .
- Using last year’s financial and production records, finalize your balance sheet, cash flow and income statements for 2015 and your projected budget for 2016. If you use Quicken® or QuickBooks® make use of the budget section to create a 2016 budget based on 2015 records. All 2015 budget entries can be modified to reflect anticipated changes in 2016.
- Take your 2015 financial records and 2016 projected whole-farm budgets and cash flow statements to your lender to discuss line-of-credit needs and plans for 2016. Using the FINPACK (cffm.umn.edu/FINPACK/default.aspx) programs or your Quicken® or QuickBooks® can help with this process.
- Grain and livestock producers should have their marketing strategies/plans in place for 2016 marketing year. Be sure to check with your local Farm Service Agency for changes in government programs and signup deadlines.
- The end of February and March 15 are the cutoff dates for signing up for most crop insurance policies in Virginia and dates depend on insurance product and where you live. Details on crop insurance and closing dates are best discussed with a local crop insurance agent. You can locate a local agent by visiting the following web site http://www3.rma.usda.gov/apps/agents/.
- Interested in finding a listing of all types of agricultural software? The Alberta Department of Agriculture and Rural Development has the most comprehensive listing of computer software designed for farm and agribusiness on the web http://www.agric.gov.ab.ca/app68/agsoft.
- Income taxes and related items:
- Farmers that do not pay estimated taxes, your 2015 return and taxes are due March 3, 2016. For Farmers that pay estimated taxes (using Form 1040-ES). You have until April 15 to file your 2015 income tax return (Form 1040).
- Virginia income tax returns must be postmarked by May 1, 2016.
- Need to find out more information about federal taxes relating to your farm business? The Farmers Tax Guide IRS Publication 225 is online and can be found at: http://www.irs.gov/file_source/pub/irs-pdf/p225.pdf.
- Decide how much you’ll contribute to an IRA for the 2015 tax year and set goals for 2016. If you use a certified financial planner (CFP), consider his/her usefulness in helping plan for retirement, college, insurance coverage, and other items. Visit the web site for the CFP organization to get information on services and standards required for planners. You can search for a CFP in your area at http://www.cfp.net/.