Farm > Farm Issues  FARM ISSUES Deferral of Insurance Proceeds Reduced Self-Employment Tax Rate Section 179 Expensing Bonus Depreciation   Deferral of Insurance Proceeds Farmers are not eligible to defer crop insurance proceeds related to crop protection revenue. If you received insurance proceeds related to a Crop Revenue Coverage (CRC) or a Revenue Assurance (RA) policy, you are not eligible to defer. Farmers may still continue to defer crop insurance proceeds related to qualifying weather related events like droughts, floods, wind, hail, or frost.   Farmers must incur a physical loss of yield from a weather related event in order to defer the income.    If you received insurance proceeds related to both, only the portion associated with the weather related event is eligible for deferral. To defer crop insurance proceed deferring the sale of crops to the following year must be a normal business practice. The IRS guidelines on normal business practice are 50% or more of the crop sales must normally be deferred into the following year. Each crop is examined on an individual basis. Return to Top Reduced Self-Employment Tax Rate For 2012 only, the self employment tax rate is 13.3%. Return to Top   Section 179 Expensing For 2011, Section 179 expensing allowance will be $500,000 for qualifying property.  This expensing allowance begins phasing out when qualified property additions reach $2,000,000.  For 2012, Section 179 expensing will be 139,000 for qualifying property.  This expensing allowance begins phasing out when qualified property additions reach $500,000. Return to Top Bonus Depreciation For 2011, 100% bonus depreication is avaliable for qualifying new (not used) property.  In 2012, bonus depreciation will be reduced to 50%. Return to Top Please contact Dale Schwieterman phone at 937-492-3161 ext 117, dschwieterman@mccrate.com or Sarah Stammen at 937-492-3161 ext 122, sstammen@mccrate.com, if you have questions regarding the above changes.