If you need help with farm program decisions, you'll have the opportunity January 6 & 7 to use specially programmed computers at the Extension Conference Center to get help with your decision-making process. The mobile computer lab will be available for farmers and land owners to analyze their farm information for help in deciding on which is the best option for their operation under the 2002 Farm Bill. Your data remains confidential and the computers do not retain your information.

You will need yield and acre information for the years 1998, 1999, 2000, and 2001, as well as, total number of crop acres, PFC yield and PFC base. The information is necessary for you to obtain the best recommendation. Appointments are available from 8:30 am to 4:30 pm on January 6 and 7. Registration is required to set appointments and you will be entering your own farm data in the computers. (Help is available.) To register call University of Illinois Extension at 877-6042.

With the advent of new commodity programs in the latest Farm Bill, Congress and USDA have implemented new soil and water conservation programs and revisions to older programs.

To provide landowners and operators with the most current information on available conservation programs, Extension will be hosting a Farm Conservation Teleconference on January 15 from 9:00 AM until noon.

Participants will learn how the new Farm Bill has affected: CRP, CREP, EQIP, Conservation Security Program, Wetland Reserve Program, Wildlife Habitat Incentive Program, Farmland Protection Program, Streambank Stabilization and Restoration, C-2000 and the Illinois Buffer Strip Initiative.

Featured speakers will be from the USDA Farm Service Agency, Illinois Department of Natural Resources, USDA Natural Resources Conservation Service, Illinois Department of Agriculture and the Association of Illinois Soil and Water Conservation Districts. Speakers will also answer questions from the listening audience.

If you would like to participate, contact Extension at 877-6042 for more information or to pre-register for the teleconference. To ensure that you receive a copy of the handouts, please pre-register by January 8.

A Central Illinois Tillage Seminar will be held on January 16 at the University of Illinois Extension building on the Illinois State Fairgrounds.

The program, featuring state and nationally recognized speakers, will begin at 9 am and will end at 3:00 pm. Topics will include an update of the Illinois SOILS (Save Our Illinois Soils) and WATER (What Are The Efficient Rates) programs, nitrogen management in corn, crop diseases and tillage, tile and bio-filters to reduce nitrogen loading, and a research update on soil compaction and strip tillage. In addition, local producers will discuss their experiences with strip tillage. Certified crop advisor credits will be available.

University of Illinois Extension, Illinois Department of Agriculture, NRCS, and local Soil and Water Conservation Districts are sponsors of the program.

Registration cost for the program is $10 per person, and pre-registration is required by January 10. Lunch will be provided. Checks can be made payable to University of Illinois Extension, and mailed to Sangamon/Menard Extension Unit, PO Box 8467, Springfield, IL 62791. Please include the name of the meeting, and a telephone number. For more information, contact Matt Montgomery at 217-782-4617, or Duane Friend at 217-782-6515.

Bob Bunselmeyer was recognized for his service to the soybean industry during the awards ceremony at the Illinois Commodity Conference in Bloomington. Bob served on the Board of the Illinois Soybean Association as the Director for District 12 since 1996.

Bob and his family moved to Macon County in 1985 and became an active part of the community. He operates a 1400 acre cash grain farm with his wife Sue. In his spare time he also runs the largest horseradish farm in Macon County and is a member of the Illinois Farm Bureau, as well as, the Illinois Corn Growers Association.

The tax package that was passed by Congress last year, The Economic Growth and Tax Relief Reconciliation Act of 2001, has several new tax provisions that will affect farmers in addition to those that went into effect last year.

First, a new 10% income tax bracket has been created. The first $6,000 of taxable income for single taxpayers will be subject to the new 10% rate. Married filing joint taxpayers will pay 10% income tax on their first $12,000 of taxable income. This new bracket replaces the tax rebate, which most people received for the last half of 2001. The other brackets above the 15% were also reduced an additional .5% for the 2002 tax year.

The limits on amounts that taxpayers can contribute to retirement plans have increased for 2002. Regular and Roth IRA contributors are now allowed to contribute $3,000 to their account. Taxpayers over 50 years of age are also allowed additional "catch up" contribution amounts. Taxpayers who are receiving the minimum distribution from their retirement plans may be surprised to find that the new minimum distribution is smaller than in past years. This is due to new distribution tables that allow for longer life expectancies than in past years. Taxpayers should check with their tax advisor to see how these retirement law changes can benefit them.

Taxpayers who purchase "new" qualifying property after September 10, 2001 are now allowed to take an additional 30% depreciation deduction. The property must be brand new, MACRS property with a class life of 20 years or less. Most breeding livestock, machinery and equipment, single purpose livestock buildings, field tile, and farm buildings will qualify. First the purchase price must be reduced for any Section 179 expense election that is taken, which could be as much as $24,000 for 2002. 30% of the remaining amount is taken as first year depreciation. Then any regular depreciation is also taken on the remainder of the purchase price. For an asset with a $50,000 purchase cost and a seven year life, a taxpayer could deduct as much as $33,750 of the cost in the first year. Illinois taxpayers should be aware that the additional 30% depreciation does not apply at the state level and a separate calculation will be required.

Farmers who took out Commodity Credit Loans in the past will recall that they treated the loans as either a loan or as a sale in the year the loan was received. The treatment was required to be the same for every year. In order to change the tax treatment of these loans, a "Change in Accounting Method" form needed to be filed with the IRS and approved. The rules have now been relaxed and a producer will be allowed to treat a loan as income in one year and treat the next year's loan as a loan. The "Change in Accounting Method" form will still need to be filed, but approval is automatic and no user fee will be charged. It appears that farmers could switch back and forth between the two methods as the need arises.

Other farm related tax-planning tools are still in place. Farmers and some landowners have the option of using farm income averaging if it is beneficial to their situation. Crop insurance proceeds can possibly be deferred and taxed in a subsequent year, if the sale of that crop would have occurred in a later year. Provisions are in place for the deferral of income for farmers who sell breeding stock as a result of drought or disaster. Keep in mind that you have choices to make in the timing of some the payments from the Farm Service Agency. Farmers are still allowed to "prepay" expenses for the following year, within limits. Consult with you tax advisor to see if you can benefit from any of these tax planning considerations or tax law changes.

Annie's Project Illinois Farm Women can look forward to special classes devoted to information management systems for farms through selected community colleges throughout Illinois. This program, referred to as Annie's Project, is designed to empower farm women to manage information systems used in critical decision making processes to build local support networks throughout the state. The target audience is farm women with a passion for business and involvement in a business they married into, were a part of all their lives, or just plain wanted to do.

Farm women will receive training for managing information in areas of Financial Records, Production Records, Marketing Plans and Risk Management, Legal/Regulation Records and Documentation, and Human Resources and Time Management. The cost of this program is $50. Signup will begin in December. Interested farm women may call the project coordinator, Ruth Hambleton, at (618) 242-9310 to receive further information about Annie's Project as details of the program are finalized. Annie's Project is sponsored by Illinois Agri-Women, University of Illinois Extension and Community Colleges in Illinois. Annie's Project is made possible by a grant from the USDA Risk Management Agency.

- By Bob Daggett, Farm Business Farm Management

As you balance your books for the past year, the Farmdoc website (www.farmdoc.uiuc.edu)offers many farm financial and business management tools. "Fast Tools" was created by Extension to help farmers and land owners with farm records and financial management decisions. This month will look at the Financial Analysis Tools.

Appraisal of Current Financial Position is a fill-in-the-blank spreadsheet that looks at current assets, current liabilities, and working capital needed.

Simple Balance Sheet, spreadsheet that prepares financial statements for a farm based on beginning and ending balance sheets and revenue and expense items.

Ratio Analysis, spreadsheet that provides key ratio calculations and benchmarks for Illinois farms based on sales, age, farm type, tenure, and all farms.

Cash Flow Planning, spreadsheet that works to develop a monthly picture of income and expenses to provide a guide for future needs.

Cash to Accrual Income Approximation, spreadsheet that approximates accrual income from schedule F on the tax forms.

Estimation of Deferred Taxes, spreadsheet estimates deferred taxes for financial statement preparation.

Net Worth Allocation, provides an estimate of the separation of earned net worth and valuation of market valuation equity.

All of the tools require Microsoft Excel 97 or Microsoft Office 97 or new to run the macros in the program.

In the coming issues of the Resource Review there will be articles highlighting some of the tools and how they can be used in farm management. The complete FAST Tools library can be found at www.farmdoc.uiuc.edu. Also, information is available on the website to get a FAST Tools subscription and receive an update of all the tools quarterly on a CD-Rom.