{"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
\nCompare Offers from Several Mortgage Lenders.<\/a><\/p>\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 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 This is just a short list. Consult with your tax accountant to see if the income that you make from your farm should be claimed.<\/p>\n Luckily, the IRS allows you to take many deductions as well. A few of the long list of deductions include:<\/p>\n Again, consult with your tax accountant to determine if your farming expenses are deductible. Just like your personal taxes, not every expense can be deducted, but the IRS does allow many options for farmers to lower their tax liability.<\/p>\n \nClick to See the Latest Mortgage Rates.<\/a><\/p>\n If your kids help you on the farm, go ahead and pay them. While this may sound silly, it can help you on your taxes. The IRS allows you to deduct wages you pay your children. Even better news, you don\u2019t have to withhold social security taxes or federal unemployment tax until they are 18 and 21 respectively.<\/p>\n Chances are that you do \u2018other farming work\u2019 outside of the farm. After all, you are running a business. You may be able to deduct business expenses just like someone running a non-farming business out of their home. For example, if you use a home office, deduct it. If you have a net operating loss, use it to lower your taxes.<\/p>\n The final tip is to get help with your taxes. Farming taxes are complicated. You may understate or even overstate your income. You may overlook important deductions and write-offs. Why take a chance? Hire an accountant with farming experience so that you know you are only paying what is necessary while taking the advantages of being a farmer.<\/p>\n Taxes for farmers are definitely more complicated than most other businesses. Get the help you need to take the right deductions and claim the right income. This way you know you are paying what you should, but not overpaying on your income taxes.<\/p>\n \nClick Here to Get Matched With a Lender.<\/span><\/a><\/p>\n","protected":false},"excerpt":{"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… Read More<\/a><\/p>\n","protected":false},"author":12,"featured_media":843,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"yoast_head":"\nDoes the IRS Recognize Your Farming Activity?<\/h2>\n
Claim all of Your Income<\/h2>\n
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Know Your Deductions<\/h2>\n
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Pay Your Kids<\/h2>\n
Don\u2019t Forget About Business Expenses<\/h2>\n
Don\u2019t do Your Taxes Yourself<\/h2>\n