2025 Year-End Tax Planning Guide for Farmers

November 17, 2025

As the end of the year quickly approaches, it is important for farmers review their tax positions and consider strategies to reduce their 2025 tax liability. HBE is ready to assist with any questions or to begin your year-end planning process. This guide highlights several key areas that may apply to your operation—along with new opportunities created by the One Big Beautiful Bill Act (OBBBA) passed this summer. The items listed below represent high-priority topics, but they are not the only considerations that may affect your taxes.

High Priority Items to Review Before Year-End

Note: These items are not exhaustive. Please read the full guide for additional opportunities that may apply to your operations.

• Review deferred grain contracts to determine whether income should be recognized in 2025 or deferred to 2026.
• Evaluate equipment and fixed asset purchases in light of 40% bonus depreciation early in the year and100% bonus depreciation after January 19, 2025.
• Consider Section 179 expensing for eligible equipment purchases, keeping income limitations in mind.
• Assess prepaid expenses—such as feed, seed, or fertilizer—to help manage 2025 taxable income.
• Review gifting strategies (grain to children or charity) to manage income and maximize tax benefits.
• Verify eligibility for the new “senior deduction” available for 2025–2028 under OBBBA.
• Plan for Ag program payments, which are taxable when received.
• Review wages paid to spouses or children for tax-advantaged benefit and payroll planning.
• Check eligibility for the QBI deduction and consider PTET elections for entity-owned farms.
• Consider year-end estimated tax payments to avoid penalties and allow for accurate return preparation.