*«CH* 



GRFJITER INCOliE VS. MORE TAX?' 



In January most farmers file Federal income tax returns. The farm account 

 is totaled and the tax return filled out. For many, the big job of accounting is 

 done for a year. The 1953 records are put away and this tax problem is dismissed 

 for another year. But to other farmers the summarized account is a valuable tool. 

 It gives, a picture of a year's operation. It's a bench-mark» From this base the 

 farmer can project changes in his business for the year ahead. The foUovring case 

 summary will serve as a guide. 



The case is that of a young married couple vdth an eight>-year-old boy. Their 

 farm includes 1075 apple trees on 35 acres. Fifty percent of the trees are Mcintosh, 

 An airblast sprayer is used. Apples are sold wholesale. Seasonal labor is hired for 

 particular operations. The- farm account summary and Federal income tax is shown be- 

 low: 



Expenses Amount 



Harvesting labor | 2350, 



Other labor 82^, 



Trees and supplies 272, 



Spray and dust materials 3677, 



Fertilizer and lime 771, 



Truck tractor & sprayer exp, lU83, 



Other repairs ^ general exp, 1011, 



Taxes, interest, insurance 10l;0, 



Boxes and cartons 2573, 



Storage J sorting, selling 6636, 

 TOmL EXPENSE $20, 837 ♦ 



Receipts 



1,1^00 bu, U,S,;'^x, Fey ® 

 5,100 bu, D.S^ Fey @ 

 2,800 bu. No. 1 Cooker© 

 900 bu. lUtility @ 

 lti72TO bu, 



*in cartons 



Total Gash Receipts 

 Total Gash Expenses 

 Net Income 

 Depreciation 

 Taxable Income 

 1953 Federal Income Tax 



3.10 



2.70 



1.75 

 1.50 



$ U,3U0. 



13,770. 



U,900. 



1,350. 

 ]i.2U,360. 



«2l,360, 



20,837. 



■tf 3*523« 



980. 



^ 107. 



The spray and dust program ^ on this farm cost V3677 in 1953. Ferbam and 

 captan were used for fungicides. In addition, two sulfur dusts and one phenyl meiv. 

 cury spray were applied. TEPP, methoxychlor,, IDE, DDT, and lead were the insecti- 

 cides used, FolloTdLng the discussion at the u'orcester Union l;eetings, a spray pro- 

 gran^ believed as effective, but less costly, was laid out as one alternative for 

 this i^arm. Sulfur instead of captan could be combined with ferbam in the first seven 

 sprays and glycdin for captan in the four reduced strength summer sprays, Dieldrin 

 would replace ttathoxychlor in the Calyx, First and Second Cover for insecticides, 



A saving of 5i)820 in spray material cost, with no change in quantity produced, 

 may result from a careful study of alternative spray programs for this farm. Can it 

 be that the original spray program gave superior finish to the apples which was worth 

 li>820 more on the wholesale market? Admittedly, at 1953 rates the gain in net income 

 means an increase of '>170 in Federal income tax. Most farmers would willingly pay 

 this added tax v/hen their net gain is nearly four times the added tax. Furthermore, 



19 5U Inc ome rates may be less than 195^3 



/l Detailed spray programs for 1"953 and tiie alternative Compared are available on 

 requost. 



B,D,CrosEffion 



R.Oj*.ines 



