Many farmers and ranchers will benefit from tax law changes brought about by the Tax Cuts and Jobs Act, according to a news release from the Internal Revenue Service.

Some of those changes, along with details about how they will affect farmers, include:

Net Operating Losses — These can now be carried forward indefinitely. Under prior law, they could only be carried forward 20 years. NOL deductions are limited to 80 percent of taxable income. They can be carried back for two years for farm and ranch businesses. Under prior law, NOLs could be carried back five years.

Qualified Business Income Deduction — For tax years beginning after Dec. 31, 2017, taxpayers other than corporations may be entitled to a deduction of up to 20 percent of their qualified business income from a qualified trade or business, including income from a passthrough entity, but not from a C corporation, plus 20 percent of qualified real estate investment trust dividends and qualified publicly traded partnership income. The deduction is subject to multiple limitations such as the type of trade or business, the taxpayer’s taxable income, the amount of W-2 wages paid with respect to the trade or business, and the unadjusted basis immediately after acquisition of qualified property held by the trade or business.

The deduction can be taken in addition to the standard or itemized deductions. In some cases, patrons of horticultural or agricultural cooperatives may be required to reduce their deduction. The IRS will be issuing separate guidance for co-ops.

Accounting method changes — Under the new law, more farm corporations and partnerships can now use the cash basis of accounting for tax purposes. This includes small business taxpayers, such as farmers and ranchers with average annual gross receipts of $25 million or less in the prior three-year period. Farmers can refer to IRS guidance (https://www.irs.gov/newsroom/tax-reform-guidance) for more information about the process that eligible small business taxpayers may use to change accounting methods.