Opinions on how to structure pay?

[ILfarmersdaughter]

I am trying to find a few good articles with something besides "it can be hard" on the pros and cons of various way to pay me! I am farming with my Dad and we need to come up with a way that would be equitable and tax friendly--if there is such a thing...

I have been googling and must not be using the right words as I am not finding anything that is really helpful.

The current options are pay me a wages, do a percentage of livestock and grain sold, rent ground from my Dad in exchange for his equipment and my labor, and a few others.

I am not limited to articles as experiences and opinions are sometimes much more useful.

Thanks!

 

[Wewild]

Ya'll first need to decide if there is enough income to support both your family's ( which in you case maybe limted to one person).

Second would be is there enough income to cover both families when the first one winds up with yours having three or more.

If the answer to either situation does not come up with a positive solution, then maybe you should get a day job.

I hope that that is not the case.

There is really no way around the tax constraints that have been placed on us that I have found. Somebody get a credit for paying and sombody pays taxes for what they get payed. You can deduct your expenses and depreciate your capital.

The only thing that can really make a difference is manipulating both to maximise the tax bracket the you fall in so you pay less taxes.

 

[TexasBred]

IL do you still live with your parents or are you out on your own? When I still lived at home and worked for my dad I asked him to pay me. He said "I'm already paying you three an a half a day". I said what do you mean?? He said 3 meals and half a bed every day. :cry2:

 

[ILfarmersdaughter]

LOL! Thankfully I have not lived at home for many years!

I should have provided more details:

I have been working with my Dad full time since August. Paying me as hired labor is just not that efficient in either of our opinions. It is not as if we do not have any ideas but we are looking more for something that could serve as a guide to the advantages and disadvantages of several options.

The farm can definitely support me (I am divorced without kids) and my parents without anyone working off of the farm. If--and that is a big if right now!--I get married again there is enough room for a husband to be added to the farm as well.

My Dad told me on the 2nd of this year he wants to start 2009 as the assistant and not the boss. That will be interesting in just the day to day let alone finances! Obviously it is essential we have a much more formal plan for now as well transitioning things over to me. I have 2 sisters and a brother that have no interest in farming. This is clearly a much bigger issue that my parents are working to address to now include the anticipated changes for the next year as my return had not really been on the radar.

TexasBred did your Dad end up paying you or did you just eat more and insist on the whole bed?

 

[TexasBred]

Il...I never made a cent. And I shared that bed with older brother til he finally went off to college. I thought I was in hog heaven then. When I got married he did actually put me on the payroll but back in those days it was for like $1.35 an hour. Lucky for me that ol' rascal worked me lots of hours.

All kidding aside it appears you and pop work well together. Do some serious talking. Go to the CPA or whoever does your taxes and run it by him. Everything doesn't have to be chiseled in stone but you do both need a good understanding on the whole deal. Get Mom involved too. Speaking of Mom, she's 91 years old today and frisky as a new pup...gotta give her a call.