by: Larry Gearhardt, OSU Income Tax School Director
With the end of the school year, many students will be heading home for the summer. The additional help on the farm will be welcomed. Most times the help is free. After all, you provide free room and board, right? But there may be tax advantages, at least from a family perspective, if you “hire” your children to work in the family business.
INCOME SHIFTING: Regardless of how a business is organized, its owners may be able to shift some of their high-taxed income into tax-free or low-taxed income by employing their children. For the children’s wages to be deductible, the work done by the children must be legitimate and the wage must be reasonable for the work. The standard deduction for an individual is $6,100 in 2013. This means that your child can earn up to $6,100 before he/she incurs any tax liability. The amount that you pay your child reduces the parent’s income which is taxed at a higher rate.
ILLUSTRATION: Let’s say that Fred Farmer, who happens to be in a 33% tax bracket, hires Fred Jr. to work on the farm for the summer, and pays him $6,100. If that $6,100 had remained with Fred Farmer, he would have paid $2,013 in taxes. Instead, Fred Jr. receives the money tax-free because of his standard deduction. The family unit saves money. Even if Fred Jr. earns more than $6100, family taxes are reduced because Fred Jr.’s beginning tax rate is 10% instead of the 33% paid by his father.
CAUTION: The ta... Read More »
by: Chris Zoller, Extension Educator, ANR
I recently saw an article by Stan Moore from Michigan State University Extension that addressed the topic of leadership on farms. This is a topic many farm managers struggle with, but is one of the critical functions that all farm managers must perform well. Below is the article Moore wrote for the Michigan State University Extension News.
What does it mean to be a leader? According to John Maxwell, “leadership is influence”. Being a leader means that your influence causes people to willingly follow you. Sometimes as farm owners/managers we forget how powerful the “willingly” part of following is. Sometimes we settle for just being the boss and that can mean that people follow you only because they are required to. Employees are still following you, but are they really being as productive as they can be, and how long will they be content in this kind of job?
As a Michigan State University Extension Educator, I recently participated in a webinar on employee management, broadcast from the Outstanding Young Farmer’ Program in Canada. The program was great, and is sure to be the topic of future MSUE News articles, but it also led me to search their recorded webinars on human resource topics. I came across a great webinar by Kellie Garrett, Senior VP for Farm Credit Canada, talking about the leadership topic. During the webinar Garrett shared several excellent thoughts on increasing the effectiveness of our leadership... Read More »
Dr. Brian Roe, Associate Professor-Department of Agricultural, Environmental and Development Economics.
The Answer: a 98.7% Chance that You’ll have a Job after Graduation
You may have seen the Yahoo! News article highlighting three agricultural degrees as among the top five “College Majors That Are Useless,” which left many professionals in the agricultural sector scratching their heads, particularly recruiters and educators of students in the fields of Agribusiness and Agricultural Economics. The Yahoo! article, and several others like it, used findings from the National Association of Colleges and Employers’ (NACE) 2012 Job Outlook study, which surveyed less than 1,000 employers on their future hiring plans.
Click here to read an article that Dr. Brian Rose has written that shows there is a great need for agricultural degrees.
Issued by Gary Hoff and Carolyn J. Schimpler
Re-printed with permission from FarmDocDaily
Farmers who plan to add additional help this year may want to consider hiring veterans. There is a substantial increase in the job pool as these individuals come back into the civilian workforce. As a further incentive, you may be eligible for a generous tax credit for hiring unemployed veterans. The credit can apply to seasonal employees if they work at least 120 hours.
Recent legislation has expanded the Work Opportunity Tax Credit (WOTC) to include qualified veterans who begin work after November 21, 2011, and before January 1, 2013. To qualify for the WOTC, the veteran must have been unemployed for at least four weeks in the year prior to being hired. A qualified veteran is a veteran who falls into one of the following categories.
• Unemployed for at least six months in the 1-year period ending on the hiring date
• A member of a family receiving assistance under the Supplemental Nutrition Assistance Program (food stamps) for at least three months during the 15-month period ending on the hiring date
• Entitled to compensation for a service-connected disability and hired within one year after being discharged or released from active duty
• Entitled to compensation for a service-connected disability and unemployed for at least six months in the 1-year period ending on the hiring date
The amount of the credit depends on a number of factors,... Read More »
By Dee Jepsen, State Agricultural Safety Leader, Ohio State University Extension, Department of Food, Agricultural, and Biological Engineering
Ohio farmers will continue to hire teens younger than 16 years old, now that Department of Labor has rescinded their stricter proposal to ban all contact with tractors and power-driven machinery. So what does that mean for Ohio teens looking for summer employment?
The current legislation is part of the Fair Labor Standards Act and falls under the Wage and Hour Division within the Department of Labor. This law was written nearly 45 years ago when it was determined certain tasks were dangerous for children under 16 years of age. Working with tractors greater than 20 horsepower and farm machinery were considered hazardous situations. However, there was an educational exemption put into place that would – and still does – allow students to be trained about these dangers, and then permitted to be hired. This program is commonly called the Tractor and Machinery Certification program. This is a 24-hour training class that ends with a written exam and a tractor skill test.
The current book that satisfies the educational training can be obtained through any OSU Extension county office. It is cataloged in the 4-H Family Guide, titled the National Safe Tractor and Machinery Operation Program. While this booklet will offer the educational piece for teens to self-study, the students will still need to complete the accompanying test... Read More »
By: Chris Bruynis, Assistant Professor & Extension Educator
The agricultural industry is one of the most dangerous occupations in the United States due to a broad range of risks associated with the occupation. Risks include road travel of slow, large equipment; many moving parts and wheels; a broad range of pesticides and fertilizers that have safety requirements associated with their use; and long hours associated with spring field operations.
Research from the National Safety Council indicates that 700 farmers and ranchers die in work-related accidents annually. Additionally, agricultural industry statistics also indicate that another 120,000 agricultural workers suffer disabling injuries from work related accidents. With proper safety measures in place and followed, many of the deaths and accidents could be prevented.
Dee Jepsen, OSU Specialist reminds us what is required and recommended for agricultural equipment while traveling on public roads:
At all times, an Slow Moving Vehicle (SMV) emblem is required
Headlights and taillights are required 30 minutes after sunrise and 30 minutes before sunset
Headlights and taillights are required during day hours if inclement weather conditions exist, including fog and rain
Additional extremity lighting is required on dual-wheeled tractors
Amber flashers and turn signals are recommended at all times
Ideally towed implements should have their own reflectors, lights, and an SMV emblem. However law requires t... Read More »
By: Mark Mechling, Extension Educator, OSU Extension, Muskingum County
As we begin 2012, we look forward to new opportunities and challenges. Many of us develop resolutions (lose weight, stop smoking, spend more time with family) yet fail to achieve the impact we wanted. Why? Perhaps our resolutions are too vague or broad, not written down or too difficult to reach.
Resolutions and goals are similar. They are definite statements of how you plan to achieve your vision of the future. In management education they are referred to as SMART goals. They should be Specific, Measurable, Attainable, Rewarding and Timed. Goals should focus your attention, energy and action on desired results.
Consider the following when making your new year’s resolutions or goals- Write them down, start small, share them with others, keep them in front of you on a daily basis and reward yourself when successful.
Here are a few management resolutions that you might want to consider adding to your list for the new year.
In 2012, I resolve to:
Participate in at least one OSU Extension management education program such as Annie’s Project or a landowner’s program on oil and gas leasing.
Conduct at least two family business meetings to discuss conflict resolution, job descriptions, succession strategies and other long range plans. Read the OSU Extension Fact Sheet by Chris Zoller on family business meetings at : http://ohioline.osu.edu/bst-fact/pdf/3612.pdf for additional informat... Read More »
Article is courtesy of Ohio AgriBusiness Association
Earlier this week, the Public Utilities Commission of Ohio granted an extension of the hours of service exemption for agricultural operations until January 1, 2012 to account for this year’s longer harvest.
The extension resulted from a request the Ohio Agribusiness Association (OABA) submitted on November 18, 2011 and a similar request submitted by the Ohio Farm Bureau on November 23. In its request, OABA stated that extreme and unpredictable weather conditions, including a much wetter than normal spring that delayed planting and a wet fall, have compounded an already delayed 2011 crop harvest and could extend Ohio’s crop harvest into at least the first few weeks of December.
This posed a problem for Ohio farmers and agribusinesses, because under current hours of service rules, agricultural operation are only exempted from hours of service requirements during planting and harvesting seasons, which the state of Ohio defines as March 1 through November 30 of each year. Without the exemption, drivers would have been limited to working only 60 hours per week and only 12 hours per day.
OABA informed the Public Utilities Commission of Ohio that farmers, cooperatives and other agribusinesses needed an extension of the hours of service beyond November 30, 2011, to get their crop harvested and to market as quickly as possible.
The Public Utilities Commission of Ohio granted a 30-day extension of the exemption t... Read More »
By: Dee Jepsen, Assistant Professor, Agricultural Safety Specialist
Recently the Department of Labor issued a proposed ruling to change the kinds of agricultural equipment and agricultural chores young people (under age 16) would be permitted to perform. Farm employers and agricultural businesses are encouraged to read more about the proposed changes and how these changes will affect youth working in agricultural settings.
To access the complete document, visit the US DOL website: http://webapps.dol.gov/FederalRegister/HtmlDisplay.aspx?DocId=25286&Month=9&Year=2011
These proposed changes will be the first update since 1970. They are designed to bring agricultural jobs in line with other guidelines required of employers in non-agricultural areas. NOTE: The proposed rules would continue to exempt children working on family farms. A summary of the changes include:
1) Regulatory changes to the Child Labor Laws for Agriculture.
• Tractors operated by 14 and 15-year old youth be equipped with approved Roll-Over Protective Structures (ROPS) and seatbelts; and that seatbelt use be mandated.
• Prohibit the use of tractors of any horse power, including small garden-tractors; whereby the training exemption will either be removed or changed to 90 hours of study.
• Require that student learners operating tractors & farm machinery on public roads have a valid state driver’s license.
• Prohibit use of electronic devices, including communicatio... Read More »
By David Marrison, OSU Extension Educator
Are you an Employer who would like to upgrade the current skill level of your employee(s)? Would you like assistance in developing and upgrading the current skill level of your agricultural workers? If your employees meet certain eligibility requirements, you may wish to explore working with the Farm worker Training & Employment Services through PathStone Corporation.
PathStone Corporation is a private not for profit regional community development and human service organization which provides training services in New York, Ohio, Pennsylvania, New Jersey, Vermont, and Puerto Rico.
Some of the services provided by PathStone include: #1) English as a Second Language; #2) Occupational Skills/and or Agriculture Upgrade Trainings and Certifications; #3) Skill Upgrading and Retraining; and #4) On- the- job training (OJT) where PathStone will subsidize up to 50% of the employee’s wages while training in a new position.
PathStone’s goal is to provide your farm/and or business with services that will save you money, while providing you with trained and skilled employees. And PathStone is able to provide these services to you the employer for free!!!
PathStone Corporation has 5 offices across Ohio in Liberty Center, Fremont, Tipp City, Painesville and Alliance.
To be eligible for the training program you must be a farm worker or the dependent/spouse of a farm worker who has worked 25 days or earned at least $800 in f... Read More »
By: Julia Nolan Woodruff, Extension Educator
It’s a great time to think about employee motivation. Dark, rainy, muddy days make for long work days around the farm. As we all wait for the skies to clear and the sun to come back, it is natural to begin feeling frustrated, stressed out, and just down right negative. I would challenge farm managers to spend some time thinking about and implementing some new or revised management practices that will help improve employee motivation and encourage a more positive feeling throughout the farm and the family.
How do you know what motivates your employees to come to work every day? How do you continue to motivate employees for the long term? These are the two big questions you must find answers to, as the farm manager. In order to begin uncovering these answers, sit down with your employees and ask them what is important to them. This can be done by having a conversation or by providing a simple list and asking employees to rank the following items from most important to least important to them. The list might include:
Fair pay and benefits
Opportunity for advancement
Being a part of the team
Safe working conditions
Ability to make decisions
Appreciation of work done and effort given
Work that is interesting – challenging
Recognition for new ideas and successful implementation
Employee ranking of these items may surprise you. Use your employee rankings as a way to start a conversation about ... Read More »
By: Julia Nolan Woodruff, Extension Educator, Erie County
Recently I attended the National Conference for Extension Risk Management Education in St. Louis and one of the keynote speakers was Professor Marianne Jennings from Arizona State University. Dr. Jennings discussed the topic of ethics and how it related to risk management. My first thought was ethics, really does that relate to risk management and farmers? We are all ethical people, right? It’s those guys running large corporations embezzling millions of dollars, using company credit cards for personal charges, manipulating reports and data, committing financial fraud and the list goes on. Do farmers really have to deal with these issues?
As you think about these statements a little more, you begin to realize that first thought about ‘those guys managing large corporations worth millions of dollars’ could actually describe a farmer. Today’s farmer may be managing a family farm, but it could be a business as large as some of the corporations we’ve read about lately with ethical issues. Just because it is a family business, it does not exempt it from ethical issues.
Another thought, ethics affect both large and small businesses. The big ethical blunders are well publicized because most times they involve millions of dollars or a major cover up of information affecting a lot of people, but that doesn’t mean that smaller businesses don’t have problems caused by unethical decisions.
Dr. Jennings ga... Read More »
by Chris Bruynis, PhD, Assistant Professor & Extension Educator
Sometimes I have the opportunity to dialogue with people wanting to enter into the business of farming. This could be returning home to the farm and entering into some business arrangement with the existing business, starting a second career after having worked away from the farm for some time, or starting a retirement business. Regardless of when or why people are motivated to return to the business of farming there are some things they need to do to be successful in being their own boss.
Consider these tips from successful business owners who learned how to position a new business for success from the start.
Get educated- Get prepared by learning about your future business, whether it's through formal education such as college or technical training, or by reading and "being a sponge" for information related to your field. Learning is a constant that needs to occur for you to stay current on business strategies and tactics necessary for success.
Get experience- Thinking and acting like business owner while working for someone else can be another strategy and stepping stone to business ownership. The secret is to constantly think and evaluate what is happening in the business environment and the business reaction to those pressures… “Would you make the same decision as your employer?”
Get advice- Consider creating an advisory board that can review your strategies and financial information... Read More »
Currently, Ohio’s minimum wage rate is $7.30 per hour. However, employers who gross under $267,000 annually, or have employees 14 or 15 years of age are only required to pay these employees at least the Federal Minimum wage rate of $7.25 per hour.
Effective January 1, 2011, Ohio’s minimum wage increases to $7.40 per hour for employees not receiving tips. Employees of employers who gross less than $271,000 annually or who are 14 or 15 years old are subject to a minimum wage of $7.25 (tied to the federal minimum wage.)
If the Ohio and the Federal minimum wages are different, by law Ohio workers are entitled to the higher of the two minimum wage requirements.
(Some aspects of the FLC are provided here, while more specific detail can be found through sources cited at the end of this article.)
Many Ohio producers employ migrant labor to help with their agricultural enterprise but they also have diversified operations with grain, beans, corn, dairy, livestock, farm markets and maybe even ag tourism. Time IS money, and a helping hand managing migrant labor can be a wise investment, given factors of Hispanic language, culture and social frameworks. Very often, this role is filled through a Farm Labor Contractor (FLC) or crew leader.
Role of the Contractor
The traditional view of a farm labor contractor revolves around their ability to obtain labor for an employer, and then manage that labor on site. While the FLC helps identify, recruit and otherwise contract the necessary labor…and is therefore also referred to as recruiter, he (or she) may serve in other capacities. Some FLCs may recruit labor but only provide transportation to the employer/job site. Others may travel to Ohio apart from the labor but live amongst them in temporary labor housing during the season. An FLC may also supervise labor, keeping time/hours, directing the work assignments and serving as a go-between for the employer. Often, they manage the physical housing facilities and deal with the daily social issues of the workforce.
Two Farm Labor Contractor Examples
Contractor A is an older female, with past and present experience as a farmwor... Read More »
Information presented above and where trade names are used, they are supplied with the understanding that no discrimination is intended and no endorsement by Ohio State University Extension is implied.
Ohio State University Extension embraces human diversity and is committed to ensuring that all research and related educational programs are available to clientele on a nondiscriminatory basis without regard to race, color, religion, sex, age, national origin, sexual orientation, gender identity or expression, disability, or veteran status. This statement is in accordance with United States Civil Rights Laws and the USDA.
Keith L. Smith, Ph.D., Associate Vice President for Agricultural Administration and Director, Ohio State University Extension TDD No. 800-589-8292 ( Ohio only) or 614-292-1868