Wednesday, February 14, 2018

Tax Changes Affecting Individuals: Part 2

-Kristen Murray,  Financial Services Specialist

If you are a wage earner, by now you may have noticed a decrease in your Federal withholding and a corresponding increase in your net paycheck. This change is the result of newly published withholding charts that reflect reforms to the tax tables for years 2018-2025. Last week, I discussed major changes to credits and deductions that will affect the taxable income of individual taxpayers. The next step in the process of projecting your 2018 tax liability is to apply the new tax tables to your projected taxable income.


Below is a side-by-side comparison that serves as a simple example of the effects of the TCJA.



You will notice that this comparison includes income from a small number of sources. This is for simplicity of demonstration. One major source of income that is missing is business income. I specifically excluded this from the above example so that next week I can dedicate the majority of my post to the effects on business income and more specifically, the section 199A qualified business income (QBI) deduction. Until then, happy calculating and may the TCJA be ever in your favor.


For more information, email FinancialServices@yankeefarmcredit.com or call 1-800-370-3276.

Wednesday, February 7, 2018

Tax Changes Affecting Individuals: Part I

-Kristen Murray,  Financial Services Specialist



If you were following the publicity surrounding the Tax Cuts and Jobs Act (TCJA) prior to its enactment, I expect you heard mention a time or two that it was designed to provide, amongst other things, significant tax relief to middle income earners. So, if you are an individual classified as a middle income earner you are probably asking yourself, “will I benefit”? The answer, as with most things tax related is it depends. There are several factors that require consideration before an individual can determine whether the TCJA will prove adventagous for them. Such condisderations include but are not limited to eligible credits and deductions. What follows is a chart that reviews notable changes to many popular credits and deductions. Something to note, if you generally do not itemize, you may focus your review on the areas in grey.

AGI: Adjusted Gross Income
AMT: Alternative Minimum Tax
MAGI: Modified Adjusted Gross Income

Then and Now: 2017 to 2018
Deductions and Credits
2017 Single
2017 MFJ
2018 Single
2018 MFJ
Standard Deduction
$6,350.00*
$12,700.00*
$12,000.00*
$24,000.00*
Additional Standard Deduction over 65 years of age and/or blind
$1,550.00*
$1,250.00 ea.*
$1,600.00*
$1,300.00 ea.*
Personal Exemptions
$4,050.00**
$4,050.00**
$0.00
$0.00
Itemized Deductions - Medical Expenses
Excess of 7.5% AGI (tax reform retroactive change)
Excess of 7.5% AGI (tax reform retroactive change)
Subject to 7.5% AGI Returns to 10% for 2019
Subject to 7.5% AGI *Returns to 10% for 2019
Itemized Deductions - SALT (state/local property, state/local/foreign income and general sales tax)
Allowed subject to AMT phase-out rules
Allowed subject to AMT phase-out rules
Maximum deduction of $10,000.00, foreign income tax excluded, subject to AMT phase-out rules
Maximum deduction of $10,000.00, foreign income tax excluded, subject to AMT phase-out rules
Itemized Deduction - Mortgage Interest
Interest paid on maximum acquisition indebtedness of $500,000 (including home equity) subject to AMT rules
Interest paid on maximum acquisition indebtedness of $1 million (including home equity) subject to AMT rules
Home equity interest disallowed and maximum acquisition indebtedness reduced to $375,000 for post 12/31/2017 acquisitions, subject to AMT rules
Home equity interest disallowed and maximum acquisition indebtedness reduced to $750, 000 for post 12/31/2017 acquisitions, subject to AMT rules
Itemized Deduction - Miscellaneous subject to 2% AGI
Qualifying expenses allowed
Qualifying expenses allowed
Previously qualified expenses disallowed
Previously qualified expenses disallowed
Child Tax Credit
$1000/qualifying child, subject to income phase-out beginning at MAGI of $75,000
$1000/qualifying child, subject to income phase-out beginning at MAGI of $110,000
$2000/qualifying child, subject to income phase-out beginning at MAGI of $200,000
$2000/qualifying child, subject to income phase-out beginning at MAGI of $400,000
Refundable Portion of Child Tax Credit
Refundable up to $1,000, subject to earned income and other qualifying factors
Refundable up to $1,000, subject to earned income and other qualifying factors
Refundable up to $1,400, subject to earned income and other qualifying factors
Refundable up to $1,400, subject to earned income and other qualifying factors
* Not Subject to AGI Phase Out
 ** Subject to AGI Phase Out


Stayed tuned, as next Wednesday I will review the interaction between such changes and the 2018-2025 tax tables.  It is a lot of information to take in, and (borrowing a line from my Yankee colleague Dan Shepard), “you will require a seat but only use the edge”. Exciting stuff folks!

For more information, email FinancialServices@yankeefarmcredit.com

Wednesday, January 31, 2018

Tax Reform and Health Care – What You Need to Know

-Kristen Murray,  Financial Services Specialist

Based on several recent conversations with both members and non-members, it is my impression that most individuals are unclear as to whether or not they will be subject to the shared responsibility payment in 2017 and subsequent years. There are many areas of the Tax Reform and Jobs Act (TRJA) that are not explicit, the Affordable Care Act (ACA) is not one of them. Here is what you need to know.

2017 tax year – The ACA remains in effect and all individuals must indicate, whether they had minimum essential coverage, qualified for an exemption from the coverage requirement or will make a shared responsibility payment (IRS.gov). If subject to the “penalty”, the calculated payment will be due with the tax return. If taxpayers omit this information, electronically filed returns will be rejected and paper filed returns suspended. In short, you can no longer file without disclosing this information and taxpayers are obligated to follow the law as written in 2010.

2018 tax year – Contrary to popular opinion, for 2018 the ACA remains in effect. Taxpayers will still need to account for the ACA shared responsibility payment when making health care decisions in 2018. Filing requirements will remain the same as the preceding tax year.


2019 tax year and beyond – This is when it happens folks; there is no longer a shared responsibility payment (penalty) for failure to obtain minimum essential health coverage. The ACA remains in effect, but the penalty now calculates as $0.00, rendering it null and void.

Please email FinancialServices@yankeefarmcredit to learn more.

Wednesday, January 24, 2018

Tax Reform and Depreciation – "A Balancing Act"

-An update on current tax reform from our Financial Services Department






The Tax Cuts and Jobs Act (TCJA) modified several categories of depreciation. What follows is a list of the most significant changes. While the act provides taxpayers increased latitude in regards to depreciation and direct expensing (writing off a current year equipment/machinery purchase i.e. tractor), it requires that taxpayers recognize gain/income when trading certain previously depreciated property (“pay back” depreciation previously taken on the traded equipment/machinery). The TCJA giveth and it taketh away.


  • Like-Kind ExchangesHistorically, the exchange of depreciable real and personal property of a like-kind class did not result in recognition of gain or loss provided both pieces of property were “held for use in a trade or business”. The TCJA limits like-kind exchanges to real property and as such, exchanges of personal property (machinery etc.) no longer qualify for non-recognition of gain or loss. Essentially, trade-ins of equipment and other personal property will be treated as sales and result in a taxable event.
  • Cars and Listed Property Passenger automobile depreciation limits have increased significantly and may be increased further through the use of bonus depreciation. Computers are no longer required to be treated as listed property and as a result no longer subject to the listed property rules that may limit depreciation benefits.
  • (MACRS) Modified Accelerated Cost Recovery SystemThe MACRS recovery period for farm machinery and equipment has changed from 7-years to 5-years (excluding grain bins, fencing, or other land improvement) and the 200% depreciation method of MACRS made available when previously farmers had been limited to the 150% MACRS method.
  • Bonus DepreciationBonus depreciation has increased from 50% to 100% (“full expensing”) and has been expanded to include both new and used property of qualifying recovery periods. A word of caution, many states do not recognize (disallow) bonus depreciation and excessive use of such a tool may result in unexpected state tax liabilities.
  • Section 179 ExpensingPre-inflation adjustments for Section 179 limits have been increased to $1 million on expensing and the phase-down threshold increased to $2.5 million annually.










  • For more details and any questions or concerns, please contact us at:

    Wednesday, November 8, 2017

    3rd Quarter Financial Results





    It's November, and as we face holidays and year-end in the not too distant future I can't help but continue to ask, "where has the year gone"?

    November is also when the third quarterly financial results for Yankee are published. We can announce that we have had another good quarter with $2.6 million in net income. A healthy net income is important for us to be able to provide credit and keep a strong patronage program. This is slightly higher than the same three month period in 2016, due to higher net interest income and higher patronage from CoBank, ACB. These increases, however, were partially offset by continued higher expenses due to the investments we are making in our new information technology platform and enhanced risk management practices.

    Quarter end loans held at September 30th were $479.9 million, down slightly from year-end. These are the loans Yankee holds onto after selling other loans as a risk mitigation tool. The portfolio continues to be concentrated in the dairy industry with 52.3 percent of loans invested in dairy businesses. Our second largest concentration is timber with 11.8 percent of loan volume. Maple comes in at number three, with 11.1 percent of the portfolio at quarter-end.

    Credit quality across the portfolio is seeing some pressures from the continue downturn in the dairy economy, but remained strong during the quarter and well within the risk bearing capacity of the Association. At quarter-end 1.0 percent of the Association loans were classified as nonperforming, a 0.2 percent improved from the end of 2016.

    Click here for the full quarterly Report to Shareholders.

    Friday, September 15, 2017

    FarmStart-Nate Everts and Regina Rinaldo, Longview Farm

    Longview Farm, LLC: Nate Everts and Regina Rinaldo FarmStart Investment
    If you've been following Longview Farm, LLC on Facebook or Instagram, you've had the pleasure of watching of the seasons progress through their ever changing harvests. From late Spring lettuce to the most recent, Winter squash in all the colors that signify the beginning of Fall in the northeast.

    In January 2017, Yankee’s FarmStart program approved Nate Everts and Regina Rinaldo of Longview Farm, LLC for a capital investment.  Nate and Regina are renting the vegetable operation in Plymouth, NH from John and Carol Perkins and will be growing for their first year in 2017.  They worked for the Perkins’ farm for a year before taking this step, which allowed them time to gain the experience needed with the markets, products, location, and operation.  Nate grew up in the area on his mother’s maple and PYO berry farm.  He had a hydroponic winter tomato business that he operated for three years.  Regina has worked on vegetable farms since 2008.

    They have been producing vegetables, fruits, herbs, and flowers which are sold in their retail stand along with some items purchased for resale.  Produce will also be sold through local farmers’ markets and to local restaurants.  Nate and Regina are using their FarmStart investment to help with yearly operating expenses that need to be paid before their income stream starts.  They are both excited about the opportunities that FarmStart will offer them. 

    The goal of FarmStart is to provide working capital to help start-up farmers establish a positive business and credit history during the early phases of their business careers. Within five years recipients should be positioned to graduate to a conventional line of credit from Yankee or another lender.

    To learn more about FarmStart please visit our website or contact your local office.

    Thursday, August 10, 2017

    FarmStart-Beyond the Bridge Organics, Abe Barnard and Jade Salvas


    With Harvest season underway for many farm operation in the area, we found recent FarmStart investment recipient,  Beyond the Bridge Organics has been busy getting their hands dirty harvesting this years garlic as well.

    Abe Barnard, and Jade Salvas starting Beyond the Bridge Organics to produce organic garlic as well as other seasonal vegetables for area sale . Their mission:

    "Beyond The Bridge Organics seeks to provide our local community, as well as communities throughout New England and beyond the very best in organically grown garlic and passing on the health benefits garlic brings to everyone."                                Beyond the Bridge Organics, www.organicmarketvt.com 


    With their main focus on their garlic crop, they are able to cultivate and refine their product for a more unique market. With an investment from the FarmStart program assisting with seed and tool purchases, and their strong dedication to their business, it looks like this season's harvest is a success.



    Photos credits facebook.com/beyondthebridgeorganics



    The goal of FarmStart is to provide working capital to help start-up farmers establish a positive business and credit history during the early phases of their careers. Within five years recipients should be able to graduate to a conventional line of credit from Yankee or another lender.


    For more information contact your local branch or e-mail FarmStart@Yankeeaca.com.


    Tuesday, August 8, 2017

    2nd Quarter Financial Results




    It's August - fair season in Vermont.  But it also means there are only four months left to 2017 - where has the year gone?

    August is also when the second quarterly financial results for Yankee are published. We can announce that we have had another good quarter with $2.9 million in net income. This is sightly higher than 2016, due to higher net interest income and income from financially related services. These increases, however, were partially offset by continued higher expenses due to the investments we are making in our new information technology platform and enhanced risk management practices.

    Quarter end loans held at June 30th were $479.4 million, down slightly from year-end. The portfolio continues to be concentrated in the dairy industry with 51.2 percent of loans invested in dairy businesses. Our second largest concentration is timber with 13.3 percent of loan volume. Maple comes in at number three, with 11.1 percent of the portfolio at quarter-end.

    Credit quality across the portfolio remained strong during the quarter and well within the risk bearing capacity of the Association. At quarter-end 1.1 percent of the Association loans were classified as nonperforming - 0.1 percent improved from the end of 2016.

     Click here for the full quarterly Report to Shareholders.

    Wednesday, August 2, 2017

    Safety, On the Farm and in the Field

    With the recent tragedies in the Vermont agricultural community, we are reminded that safety on the farm must be a priority for all individuals. Whether you are running machinery, working with animals in the barn or finishing products for retail, agricultural safety is a lesson you cannot afford to skip. We value our members and their teams and want to ensure that you are receiving and providing the best safety training our area has to offer. To help, we here at Yankee Farm Credit would like to reimburse the $90.00 registration cost of the Vermont Farm Safety Program for any member who attends.  To take advantage of this offer or if you are a New York or New Hampshire member and would like to participate in a more local training event and need information on fee reimbursement for approved programs, please contact us at info@yankeeaca.com or    1-800-639-3053.

    We have put together just a few of the many online resources available to any individual looking for training, events and material on farm and agriculture safety.

    New Hampshire Farm Bureau-For links to PTO Shields and ROPS Rebate Program

    The National Education Center for Agricultural Safety

    New York Department of Labor-Safety Reference Material

    Bassett Healthcare Network-New York Center for Agricultural Medicine and Health

    New York State Department of Health- Farm Safety, Children ages birth to 19 years.

    VT Agency of AG Food and Markets-Farm Safety Program

    UVM Extension-Farm Health and Safety

    2017 National Farm Safety and Health Week is September 17th - 23rd.

    Friday, July 14, 2017

    Meet our 2017 Summer Intern: Sam Hartman


    We are excited to have four interns join us this year. They will be an important part of several special projects this summer. We'll feature each one here, so you can get to know them. Please welcome them to the team!

    Name: Sam Hartman

    Hometown: Jericho, VT                

    College or University and area of study: I attend UVM, with a BS in Business Administration and BA in French.

    How did you hear about Yankee Farm Credit? I heard about Yankee through a board member who was one of my professors.

    What Branch Location and department are you working in? I am currently working in St. Albans, but last year I worked in Williston.

    What do you hope to get out of your internship that you may not get from a traditional classroom? I hope to get hands on experience learning about ag finance, as well as business system organization in general.

    Plans for after graduation? I would like to continue work within the Farm Credit network and eventually to graduate school.