9 tax tips for farmers
DESCRIPTION
Some common Tax Tips for farmers learn about this Tax Breaks if you are in Agriculture, Industry. It helped farmers at the time of Tax FilingTRANSCRIPT
Nine Tax Tips for Farmers
9 Tips to Help at Tax Time
Crop Insurance Payments
• Insurance payments from Crop
Insurance and Crop Disaster
Support are considered income.
• Generally, you should report these
payments as income in the year
you received them.
Weather-Related Sales
• Bad weather, such as drought or
flood, may force you to sell more
livestock than you normally would
in a year.
• If this is the case, you may be able to
postpone reporting a gain from the sale
of the extra animals.
Sale of Items purchased for Resale
• You must report the sale of
livestock or other items you bought
for the specific purpose of resale.
• You may be able to deduct their
cost basis in the year of their sale.
• You may also deduct other
related costs such as sales tax and freight.
Employee Salary
• You can deduct wages paid to your
farm’s full and part-time
employees.
• You are required to withhold Social
Security, Medicare and income
taxes from their wages.
Farm Expenditure
• Farmers may deduct ordinary and
necessary expenditures as business
expenses.
• Ordinary and necessary expenses
are expenses that are considered a
common and accepted cost for the
business of farming.
Loan Repayment
• You can only deduct the interest
paid on a loan if the proceeds
from the loan are used for your
farm.
• You cannot deduct interest paid
on a loan that you used for
personal expenses.
Farm Income Averaging
• For tax purposes, you may be able
to average some or all of the
farm’s current year's income by
spreading it out over the last three
years.
• This may reduce your taxes if your
farm income is higher this year
than past three years.
Fuel Tax Refund
• You may be able to claim a tax
refund or a tax credit for the
federal excise taxes paid on the
fuel you used on your farm or
for farm work.
Operating Loss
• If your expenses are more than
income for the year, you may
have a net operating loss.
• You can carry that loss over to
other years and deduct it.
• In this way, you may receive a
refund of all or part of the income
tax you paid in previous years or even reduce your tax
liability in future years.
To Learn More Visit
www.reliancetaxgroup.com Or Call
(877) 597-0153