Get Ready … it’s Tax Season: Six Tax Prep Tips!

As you settle down after the busy holiday season, you will soon face another season … tax season! As a small business owner you need to understand how taxes are going to affect you and your business. It is important that you file properly, avoid audits and claim the right tax deductions.

Here are a few tips that may ease the burden of tax preparation and help you get ready for the April 15, 2013 deadline.

  1. Keep Good Records
    Proper record-keeping year-round is the first step to ensuring your taxes are filed accurately and that you have the paperwork you need to back-up your deduction claims should you be audited.
  2. Understand Your Deductions
    What small business deductions can you take? Do you have the documentation and original receipts to back them up? Tax credits and deductions change each year.
  3. Use the Small Business Jobs Act
    The Small Business Jobs Act of 2010 signed into law by President Obama has over 17 tax provisions decreasing the tax burdens for small businesses. You can take advantage of several of these provisions during this year’s tax season. Using them will provide great savings for your business.
  4. Remember the Tax Credits within the Affordable Care Act
    These tax credits will allow small businesses to cover up to 35 percent of the premiums a small business pays to cover its workers. In 2014, the rate will increase to 50 percent.
  5. Avoid Common Audit Traps
    It is very important to be aware of potential red flags and act on them before the IRS does:
    • Classifying Employees as Independent Contractors – Independent contractors and employees are not the same, and it’s important to understand the difference. In the eyes of the IRS, misclassification can be seen as an attempt to avoid payroll taxes, and non-compliance can bring penalties and back taxes.
    • Home Office Deduction – This deduction is very specific and not all home-based businesses will qualify. Likewise, if you run your business from a commercial location and claim the home office deduction, you might trigger some interest from the IRS. Know how to determine if you are eligible to claim it, and what specific expenses you can write off.
    • Large Sum Miscellaneous Deductions – If you claim a large amount of itemized deductions relative to your income, the IRS will get suspicious. Likewise, if you bucket a large amount of miscellaneous expenses, you may raise eyebrows. Be specific and label every deduction.
  6. Keep Business and Personal Expenses Separate
    The IRS scrutinizes personal expenses that may have been claimed as a business expense, such as the use of a business vehicle for personal use. Be diligent about keeping good records. Maintain a separate bank and credit card account for your business.

Source: By Patricia Brown-Dixon, SBA Region 7 Administrator. For additional information, visit and search for the SBA Small Business Tax Guide or contact Read more about Get Ready … it’s Tax Season: Six Tax Prep Tips!


Medicaid Expansion in Nebraska

This report examines the rural implications of the new Medicaid initiative as provided for in the Affordable Care Act. We examine the fiscal and economic impacts - additional revenue provided to the state, jobs created and costs to consumers of uncompensated care without expansion - of the state’s  participation in the expansion of Medicaid.

The report concludes that significant implications for Nebraska’s small towns and rural residents underlie the decision of whether the state will participate in expanding Medicaid coverage. Read more about Medicaid Expansion in Nebraska

New Farm Microloan Program from USDA

The US Department of Agriculture has established a microloan program targeted at helping small farm operators. Microloans of up to $35,000 will be available. Agriculture Secretary Tom Vilsack said the program is “designed to help bolster family-run farms and help disadvantaged farmers and military veterans seeking to start a farm,” according to the Associated Press.

This program is an exciting development. Value-added farmers producing niche, specialty, or organic crops are a quickly expanding segment of agriculture. Vilsack told the AP that direct-to-consumer sales are growing, with a 60 percent uptick in farmers markets over the last three years.

Capital from these loans can be used for a wide variety of expenses, from seed to delivery vehicles. Vilsack said farmers would have up to seven years to pay off the loan, and the interest would be roughly 4.9 percent. Read more about New Farm Microloan Program from USDA


Obstacles Abundant for Health Insurance Coverage in Rural Nebraska and Rural Montana

Two new Center for Rural Affairs reports examine health insurance coverage in rural Nebraska and rural Montana, the two states where we do much of our health care work. Based on recently released county data from the US Census Bureau, we found more rural residents under 65 in both states are without health insurance.

The charts show the uninsured rates by county type (metropolitan counties are large city and suburbs as designated by the Census Bureau; micropolitan counties are counties with a small city of 10,000 to 49,999; and rural counties are all other counties). 

Clearly, rural Americans face structural barriers to adequate health insurance coverage. With an economic foundation of small businesses and self-employment, rural communities are not well served by a health insurance system that relies on employer-based coverage. Many families are forced to purchase from the individual insurance market where they often wind up underinsured, with coverage that costs too much and provides too little. Those who cannot afford the generally more expensive individual packages must go without or rely on public insurance.

Unfortunately, these primary means of getting (or not getting) health insurance translate into weaker rural communities. A community’s economic development, community cohesiveness, and health care infrastructure are all threatened by a lack of affordable health insurance that results in more families without health insurance or less than adequate insurance.

And we all pay for the skyrocketing costs of health insurance as the insured and health care providers in rural Nebraska and Montana face increasing economic pressure from uncompensated care, or the costs of health care services to the uninsured or underinsured that are not paid by insurance or any other source. Like most issues facing rural America, everyone is in it together.

The significantly higher uninsured rates in rural Nebraska and Montana also affect the health status of rural residents and communities. Research shows rural people receive fewer necessary health care services and less preventive care, leading to more expensive health care later. The ultimate result of less than adequate care for rural residents is a worsening of health status and an increase in chronic conditions, exactly what has been found in rural areas.

In the coming months policymakers in both states have opportunities to enhance health insurance coverage that will improve the health of rural people and the economies of rural communities. We found that choosing the new Medicaid initiative for working adults as allowed in the Affordable Care Act will reduce the rural uninsured rate in Nebraska by half and in Montana by a third. The federal government pays all the cost of this initiative for its first three years.

Both states would be wise to opt for this new initiative. It’s a smart investment. It provides hard-working families in both states the security of quality health care, boosts the economy of both states and prevents health problems. Read more about Obstacles Abundant for Health Insurance Coverage in Rural Nebraska and Rural Montana

  • Rural Health

Why I Support the Center

I'm Doug Crabtree. My wife Anna and I own and operate a certified organic dryland crop farm just south of the Canadian border in Hill County, Montana. We first worked with the Center back in the 90’s when trying to make a connection to start farming through the Land Link program.

While we were unable to make a connection at that time, we saved and learned for nearly 20 years and purchased our own land and machinery in 2009.

We used a number of beginning farmer financing and conservation programs authorized in the 2008 Farm Bill to make our dream of farming into a reality. The Center, along with the National Sustainable Agriculture Coalition (NSAC), made those programs happen.

We have also relied on the Center to interpret program rules and help us to “educate” local Farm Service Agency (FSA) and Natural Resources Conservation Service (NRCS) staff on programs and provisions for beginning farmers. We really appreciate the Center giving us an opportunity to advocate for programs and policies to support beginning farmers and conservation through “fly-ins” to Washington.

Without the Center and NSAC we would not be farming today.

Watch our story here.

*photos by Anna Jones-Crabtree Read more about Why I Support the Center

Your stories

Amazing Opportunity for Livestock Enthusiasts Awaits

An established direct-market meat operation is seeking renters in Oregon’s Central Willamette Valley.

Rainshadow El Rancho is a 120-acre ranch raising and selling bison, pork, and poultry directly to consumers. The operation includes a USDA-approved poultry processing plant used to process the ranch’s birds and birds for other producers. 

Two large barns are included on the property. Livestock handling corrals include a squeeze chute. And an established small orchard and room for a large garden cap off the ranch.

Owners prefer leasing the ranch to an experienced person(s). In turn, the renter(s) will have the first option to purchase.
This is an incredible opportunity for someone with livestock experience. The slaughter facility could be managed by a separate person(s), depending on the situation.
Give me a call, 402.687.2100, or send an email,, to learn more. Read more about Amazing Opportunity for Livestock Enthusiasts Awaits

  • Farm PolicyBeginning Farmer & Rancher

Living, Loving, and Working for an Even Better Rural America

It was nearing the end of November and the first half of my senior year of college. The semester and two jobs had left me groggy. I scrolled through my email inbox deleting the spam until I came across a subject line reading, “Nice letter in the Mirror-Sun.”

A letter-to-the-editor I had written to the Lyons Mirror-Sun newspaper had appeared that week. It was about whether or not to tear down the old opera house in my hometown. The email was from Brian Depew, Assistant Executive Director and Director of Policy at the Center for Rural Affairs. I didn’t know who he was and had only recently learned about the Center and its mission.

Brian’s email encouraged my interest in rural issues. He told me to look at the internship opportunities at the Center. Unfortunately, the opera house was torn down. But I did check into those internship opportunities.
I spent that summer in Lyons learning about rural America and seeing my hometown in a new light. My walk down the brick Main Street was filled with anticipation every day during my internship. Never before had I worked in a place where every person was so fully invested. Skip forward nearly five years later, and this is why I still work at the Center. 

Not only does the Center have an admirable mission, they have admirable people working for them. They are the kind of people that advocate for a better community by working on federal policy late into the day only to rush out the door for a city council meeting. 

I can summarize the Center for Rural Affairs this way: We live in rural America. We love rural America. We work to make it even better. Read more about Living, Loving, and Working for an Even Better Rural America

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Your stories

Congress Approves Energy Tax Credits and Saves 37,000 Jobs

With the last-minute fiscal cliff deal, most of the country breathed a sigh of relief. But those concerned about rural communities and renewable energy had an additional reason to celebrate the deal: the extension of the Investment Tax Credit and Production Tax Credit.

Both are vital tools for an industry that has proven beneficial to rural communities, especially in the Upper Midwest and Great Plains. The wind industry has helped provide new employment opportunities, sources of revenue, and additional sources of income to farmers and ranchers.

The extension saved an estimated 37,000 jobs out of the total 75,000 employed by the wind industry in the US, according to Bloomberg Businessweek. Construction of turbines and associated parts has led to new manufacturing booms in several states. Right now about 60 percent of component parts for turbines are made in the United States. Saving over a third of wind energy jobs maintains that additional economic opportunity for rural areas.

Other benefits for communities flow from the presence of projects and factories – new revenue sources from property taxes, which can amount to $189 million annually the county tax base. That new income for rural communities means more funding for the fire and police departments, public schools, infrastructure, and other public services. Land-lease payments for landowners in those communities average about $10,000 per turbine each year.

The extension changes the credits slightly and for the better. Developers no longer need to finish construction in 2013 to qualify. Instead they will qualify if construction begins this year.

The PTC continues to provide a return based on the energy produced by a project – about 2.2 cents for every kilowatt-hour the turbine produces during the first decade of operation. Some developers can instead choose to take the Investment Tax Credit, which returns some of the initial investment in projects immediately.

The extension is a boon to companies that were uncertain over the future of projects last year. 2012 was a good year for wind energy in the US. Expectations for new installations totaled 12,000 megawatts, but early in the year the actual total was around 50,000 megawatts. So far, wind energy has contributed about 35 percent of all newly installed generating capacity in the United States over the past five years. It has added more than coal and nuclear combined, coming in second only to natural gas. But uncertainty over the extension of the ITC and PTC made 2013 seem bleak.

The wind energy industry has shown great potential, and not just in energy output. It has shown an ability to create new domestic manufacturing jobs, provide additional income, and reinvest in small communities through new revenue sources. A short extension is better than none, but greater stability in the industry would help investors feel secure when they consider future projects and investments in rural America. Read more about Congress Approves Energy Tax Credits and Saves 37,000 Jobs

  • Clean Energy

New Farmers Find Thriving Opportunities in Niche & Specialty Markets

Family farming has long been an important contributor to community and economic vitality in rural America. But the opportunities in conventional family farming are shrinking. Young Americans who want to start 21st century family farms are increasingly looking to opportunities in niche and specialty markets.

A new Union of Concerned Scientists report lends support to that approach. It found that Minnesota and Vermont organic dairy farms contributed more to employment, income, and gross state product per dollar value of production than conventional dairies. Organic farms were also more profitable than conventional farms. The net farm revenue per cow of organic farms exceeded that of conventional farms of a similar size in Minnesota. In Vermont, it exceeded that of both big and small conventional farms.

Organic milk production is defying the trend toward bigger and fewer farms. The number of cows per organic farm actually decreased in recent years to an average of 63 in Vermont and 80 in Minnesota. This is roughly half the size of conventional dairies. The drop in size followed tightening of USDA organic standards requiring access to pasture throughout the grazing season.

Specialty markets like organic offer the opportunity to produce higher value products by substituting skilled labor and management for capital. They provide a strategy to squeeze more earnings out of each cow, each acre, and each dollar. That’s a good fit for beginning farmers, who generally have more management and skills than cows, acres, or dollars.

It’s also a good fit for small farms. The Union of Concerned Scientists report profiles farms that have used organic markets to sustain their small operations, including the 160 acre, 90 cow Full Circle Farm of Seymour, Wisconsin. The farm is operated by long-time Center for Rural Affairs supporters Rick and Valerie Adamski. They are now helping the next generation get started on their farm through a partnership with 27-year-old beginning farmer Andy Jaworski. He and the Adamskis have split inputs, labor, and revenue through a milk-share agreement.

Organic farming isn’t the solution for every family farm or rural community. But small entrepreneurship – local community members seeking new ways to create 21st century opportunities – is a big part of the solution for all of rural America. Our communities no longer have Main Streets teaming with retail businesses serving small farms on every section selling commodities.

To thrive, we must search out the new opportunities. We must support our new entrepreneurs who find those opportunities, even if they do things a little differently. And we must participate in and shape change so we can hang onto things that matter – strong communities, good neighbors, and genuine economic opportunity for rural people. Read more about New Farmers Find Thriving Opportunities in Niche & Specialty Markets

  • Farm Policy

A Savory REAP Business Just Down the Street

When I first started at the Center for Rural Affairs, I made sure to bring my lunch from home. I figured there wouldn’t be a lot of options in Lyons, the Center’s hometown. So it was a pleasant surprise to find Soup-N-More, a natural foods grocery, just down the street.

As the name suggests, it all began with soup. A few years ago Rebecka Fleischman wanted to do something with her thanksgiving leftovers. So she started dehydrating her own vegetables, throwing in some spices and giving away these ready-made soup mixes to family and friends.

Word soon spread and Rebecka developed a small customer base. She remembers traveling to their first food show and selling out within hours. “That’s when I realized we had a business,” she said.

Rebecka and husband Allen started by converting the living room into a commercial kitchen. But they quickly outgrew the space. And that’s when they turned to REAP for help. 

The Center’s Rural Enterprise Assistance Project (REAP) is a small business development program unlike any other. REAP is Nebraska’s largest supporter of microenterprise, assisting entrepreneurs often when no other lending capital is available. REAP provides new and existing businesses with: technical assistance, financing, networking, and business training. 

REAP worked with Soup-N-More to secure a USDA micro business loan to purchase a storefront building. It was important to act quickly while the building was still available, so REAP loan specialists expedited the process. In under two weeks the Fleischman’s had the key. 

Today their commercial kitchen and natural food store supports four employees, seven local farmers, and over a dozen local vendors. Over the internet, they sell their products all over the country and to several foreign countries. With REAP’s help, Soup-N-More is now a thriving business and a rural success story – and lucky for me, it’s right here in Lyons! 

You can find out what kind of resources REAP offers here or by contacting a REAP representative. Read more about A Savory REAP Business Just Down the Street


Community Development Resource Guide

The Community Development Resource Guide is an easy reference document. It contains key references to assist communities. You will be led to grants, foundations, even low-interest loans through the guide.

The guide can be used many ways. We recommend you use it in conjunction with strong strategic planning to help determine exactly what resources your community needs. Read more about Community Development Resource Guide

Opportunity on the Line: Transmission Remains Obstacle to Clean Energy

The electric power transmission network was not designed to penetrate lightly populated regions of the Upper Midwest and Great Plains, a region brimming with wind energy potential.  Instead, our grid was designed to connect large, individual generating units with discreet population centers. It is abundantly clear that those states with the greatest wind resources – and therefore the greatest development potential – are leaving a lot on the table when it comes to economic development and energy independence within their respective states.  Read more about Opportunity on the Line: Transmission Remains Obstacle to Clean Energy


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