Agricultural businesses enjoy unique tax advantages that can create meaningful savings with proper planning. Farmers" Leverage Special Deductions & Income Averaging

1. Review Section 179 and Bonus Depreciation Options

Equipment purchases—tractors, combines, irrigation systems—can often be fully or partially expensed. For 2026, modeling the timing of purchases is crucial to avoid losing out on shrinking depreciation incentives.

2. Use Farm Income Averaging

This allows farmers to spread certain income across three prior years, helping smooth spikes from strong harvest seasons or livestock sales and potentially reducing overall tax liability.

3. Evaluate Prepaid Expenses

Seed, feed, fertilizer, and supplies purchased before year‑end can reduce current income when structured correctly under IRS rules.

4. Conservation & Energy Credits

If investing in land conservation, solar installations, or other energy-efficient improvements, review available federal credits early to optimize eligibility.