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Simon, Fitzgerald, Cooke, Reed and Welch
Simon Fitzgerald, LLC
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Can paying taxes help with debt relief?

Farmers in Louisiana may be among others in the nation who say that letting potential tax breaks pass them by has helped them in the long-run from an economic standpoint. Many farmers have high financial obligations for machinery. To overcome such issues, some have taken to holding off on new purchases as a creative form of debt relief.

By running older machines longer, and avoiding new purchases until existing equipment is paid for in full, many farmers say they have improved their overall financial stability. Where taxes are concerned, some farmers say it is often less expensive to forgo tax breaks that may be available by purchasing new machinery than to get the latest, greatest equipment, but accrue more debt. The farmers say it simply costs them less to pay the taxes outright.

The practice of extending the typical life expectancy of farm equipment in an effort to save money leaves some questioning whether doing so increases risk for injury. It's logical to assume that a heavy piece of machinery projected to function efficiently and safely for five years may begin to break down or malfunction if used beyond the projected life-span date. It's no secret that farming is highly dangerous work, and serious, if not fatal injuries can occur if equipment is not well-maintained.

It is never a good idea to minimize safety to save money. Louisiana farmers are not the only residents of the state who may be experiencing financial problems at this time. Anyone who wishes to explore debt relief options (especially those that do not place workers' safety at risk) may do so by requesting meetings with experienced attorneys.

Source: farmfutures.com, "Equipment debt relief in sight", Jacqui Fatka, Feb. 27, 2018

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