By Brian Hefty
- Consult your tax advisor, but prepaying for tax reasons is usually a great idea to delay your tax bill, especially with higher tax rates. If YOU can use that money for the next few years before you have to pay it in tax, that opportunity cost of money is worth quite a bit.
- Know your limits on how much you can prepay. The rule has always been you can prepay up to half of your total expenses (this is ALL expenses including depreciation), but again, talk to your tax advisor.
- Even if you don’t need to prepay for tax reasons, there are still great deals out there in early January. Your savings are typically in the range of 12% to 20% APR, so that’s a lot better than letting your cash sit in the bank. It is rare when you find any “deals” in-season, so buy now if you want a lower price.
- Always prepay with someone you can trust or pick the product up the day you pay for it. There is risk when you prepay without collateral, so make sure you choose wisely where your prepay money goes.
- Wherever you prepay, make sure you can get your money back or switch products at the prepay price if your plans change. Also, ask if you will get interest on your money if it needs to be refunded next summer.
- In 2014 there will not be as many seed or pesticide supply issues as we’ve seen in recent years, but some products will sell out early, possibly even by Jan. 6, so order and pay for them immediately if you want them. These products include Status, Force Smartboxes, Banvel (I know. For a 40-year-old herbicide, this seems crazy to me, too.), Fierce, and Authority MTZ. There may be a few others that run short, but these are the main ones we know of today.