{"id":840,"date":"2020-06-24T12:37:25","date_gmt":"2020-06-24T12:37:25","guid":{"rendered":"http:\/\/agricultureloan.com\/?p=840"},"modified":"2023-03-03T23:38:20","modified_gmt":"2023-03-03T23:38:20","slug":"tax-tips-farmers","status":"publish","type":"post","link":"https:\/\/agricultureloan.com\/tax-tips-farmers\/","title":{"rendered":"Tax Tips for Farmers"},"content":{"rendered":"

Doing your taxes when you own a business is complicated. Doing your taxes when you own a farm is even more complicated. Farmers often have multiple streams of income as well as different expenses, both of which affect their taxes. Keep reading to learn the top tax tips for farmers.<\/p>\n

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Does the IRS Recognize Your Farming Activity?<\/h2>\n

First, you need to classify your farming activity. Does the IRS recognize it as farming or is it a hobby? While the laws are complicated, a simple way to look at it is like this:<\/p>\n

If you operate a farm for profit and use the funds for your livelihood, the IRS will likely recognize it as a farm. If you operate a small garden and sell your produce at the local farmer\u2019s market or to your neighbors, but you have a full-time income from something non-farm related, the IRS probably won\u2019t consider it farm income.<\/p>\n

What\u2019s the difference? If the IRS recognizes your income as farm income, you may be eligible for more write-offs and deductions. If it\u2019s just hobby income, you don\u2019t get those same write-offs, so make sure you are clear with your intentions before you start.<\/p>\n

Claim all of Your Income<\/h2>\n

Farmers often have income from many sources. As a general rule, you should report all of it in order to avoid an audit. Just what qualifies as income? The sky is the limit, but here are a few examples:<\/p>\n