Tax Tips for Farmers in 2020

Tax season is approaching and for farmers and ranchers, filing taxes can be a tedious and sometimes difficult process.

Here are some tips to help you get started and make sure you’re maximizing your potential refund:

Know Your Income

As a farmer, there are a lot of things you should be reporting as income. Things like livestock sales, produce and grains, agriculture program payments, crop insurance proceeds, income from custom hire, gas and fuel tax credits, and distributions from a cooperative should all be counted. If you lease or rent your farm, you'll also need to report any income received from that.

Know Your Deductions 

There is a long list of things you can deduct as a farmer or rancher like feed, vet costs, fertilizers, health insurance, seeds, mortgage interest and storage.

Find Added Deductions

Some years can be more difficult than others so if you lost more income than you gained last year, you can deduct your losses. You can also deduct a home office and possibly even an earned tax income credit if you qualify.

Get Help When You Need It

If you run into a snag on what to report, what to deduct or any other tax questions, reach out to a local tax professional who specializes in farming or visit the IRS website to help get the answers you need.

In the end, just make sure you are organized throughout the year so you are well-prepared ahead of tax season. If you have questions about what you need to file your taxes, contact the IRS for more information. Happy filing!

United Country Real Estate has been helping farmers across the country with buying and selling their land since 1925. If you are looking for more land or need help selling your current operation, visit www.UnitedCountry.com to find an agent near you.

Sources:

https://www.creditkarma.com/tax/i/tax-tips-farmers

https://agamerica.com/year-end-tax-tips