taxes

[PETSNEGGS]

I'm sure there has been alot of talk about this but, I have searched and not been able to find any. I think I need to learn how to navigate HT better but, that will come with time I'm sure.... What I was wondering.... Is there a way to claim my animals, feed, and their upkeep? I don't have a huge farm but, I do spend alot on my goats, chickens and pigs, never mind the dogs. It is just my husband and I in the house now and last year for the first time ever we had to pay in... almost killed us, and we are still paying on it. I understand that we all need to put in our fair share but, when you can hardly make it from one week to the other sometimes it really blows your mind when they tell you you owe. We don't spend on lavish things and our greatest asset is our double wide home which we are still paying on. I guess we live quite plain and I was wondering if there was anyway we could file this year without having to pay out our noses. Thanks for any advise and if there is a thread about this please send me the link and I'll read away. thanks again and hope all are having a wonderful Saturday.

[plumcreekfarm]

If you can show it is a farm buisness with both income and expenses you can file as a farm and show a loss that will help lower your tax bill.

[uncle Will in In.]

If you are selling more farm stuff than it is costing you to produce it, it is time to bite the bullet and hire your taxes prepared. There are many deductions that you can take if your farming is more than a hobby. It is unlikely you would owe any fereral income taxes on a small opperation. You do have to pay on wages regardless of the farm if your earnings are high enough.

[Beeman]

Legally??? You can deduct anything you care to, nothing matters until you're audited.

[RiverPines]

Sure, just become a legal business. Get a business license and all that fun stuff and there you go.
Just dont show loss year after year.

[PETSNEGGS]

Well, I guess right now you could say it is a hobby with the the joy of having fresh eggs and hopefully soon fresh goats milk. Only sell some PB piglets here and there and some eggs... so I guess like most hobbies it is just an expensive hobby... but, it sure gives me alot of joy. I guess I'll have to talk hubby into another baby...NOT!

[olsonla]

In WI, If you are Selling produce/ livestock or goods ( ie. eggs) and keep an account or record of it - just like a farm / buisness- then you should be filing as a Farm ( a schedual C- I think??) just run it like any other buisness- keep accurate records of everything expenses and income- I have a small flock of laying hens and when I have more then we can eat at home I bring some into work and ask for a $1-2 donation for chicken feed- then I declare that as income- I have made anywere from $100-$200 a year in egg sales which offsets the cost of feed alittle- We also plan on getting a couple of calves in the spring- one for ourselves and one to sell. I also use a tax preparer that is familar with farm taxes, which is a great help- as she has explained so many things that are ligit for me to claim for the farm, Plus the cost of having her prepare my taxes, is a write off.... - ALso- Once you start fileing as a farm (for profit) never again say you are in it as a "hobby", before you know it, some IRS agent will be pounding on your door for an audit... Also- all you have to show is a net profit once every 5 years (more income then expenses) Just google farm taxes or deductions- you would be suprised!
Lori Volden, Cannon Valley Percherons, www.wildwebranchers.com/olsoncenturyfarm

[rambler]

A farm filing is a schedule F. You sometimes have a deadline of March 1st to file it, depending on if you made money or not. Do not use the business forms, use F.

There is a lot of grey area, but you really do need to be showing some income in order to take the expenses off. If you spent more than you made, you have a tax deduction. If you continue to have negative farm income year after year, it will flag an audit. They do not want you to have a hobby that you lose money on just to take the tax deduction. The old rule of thumb was to make a profit 2 out of 5 years in the farming, and you were cool.

There are current expenses, equipment expenses, and long-term expenses, and each is handled differently. Don't try to lump them all together - flag, audit.

As someone said, spending $300 on the CPA who understands farm taxes will be money _very_ well spent, if you have enough income & expense to fool with this.

You can't (by rights) deduct the cost of raising your own food.

Good luck with figuring it all out.

--->Paul

[Terri]

I have been told that if you itemize your taxes, that you can deduct the worth of donated vegetables. You will need an itemized, signed receipt.

So I have been told.

Basically, if I donate $10 worth of produce, I can reduce our stated income by $10.

I have NOT! had our taxes done this year, yet, but I have receipts for the excess vegetables I donated to the Food Pantry.

[Wayne02]

I wonder if it is possible to deduct some of the travel expense (gas) on schedule "F" for driving from our home to our farm where the cows and such are located? It's about 100 miles between the house and the farm.

[rambler]

Originally Posted by Wayne02

I wonder if it is possible to deduct some of the travel expense (gas) on schedule "F" for driving from our home to our farm where the cows and such are located? It's about 100 miles between the house and the farm.

Those things get very complicated. Are you driving to a 2nd job as well, or just the farming? Do you have 2 vehicles, or just one? Etc.

Often it is best to have a pickup, and if your farm operation is big enough to justify such a thing, deduct a % of the use of that pickup. You can deduct up to 75%; but you dern better be able to justify whatever % you deduct as real actual farm use. Are you keeping fuel & repair slips, etc.?

Just driving to the farm is likely not a real expense - everyone drives to work. Driving to a 2nd job is often deductable tho, so do you have 2 jobs? Using the vehicle to go get supplies for the farm is deductable. See how cmplicated it gets?

A good CPA can set this up for you. The IRS wants you to have real business expenses in running a real business where you make real income. A tax shelter for you to play at farming but not really sell anything gets to be a real thorny issue.....

--->Paul

[Wayne02]

Originally Posted by rambler

Those things get very complicated. Are you driving to a 2nd job as well, or just the farming? Do you have 2 vehicles, or just one? Etc.

Often it is best to have a pickup, and if your farm operation is big enough to justify such a thing, deduct a % of the use of that pickup. You can deduct up to 75%; but you dern better be able to justify whatever % you deduct as real actual farm use. Are you keeping fuel & repair slips, etc.?

Just driving to the farm is likely not a real expense - everyone drives to work. Driving to a 2nd job is often deductable tho, so do you have 2 jobs? Using the vehicle to go get supplies for the farm is deductable. See how cmplicated it gets?

A good CPA can set this up for you. The IRS wants you to have real business expenses in running a real business where you make real income. A tax shelter for you to play at farming but not really sell anything gets to be a real thorny issue.....
--->Paul

Thanks very much for the input on this, I suspected it would not be clear-cut. We use our pickup as a daily driver at our primary residence and when traveling to/from the farm property and of course when working on the property. Quite frankly my truck gets the snot beat out of it working on that farm property. There are neighboring family members who take care of any emergency issues with the cattle in our absence. 70% of the time when we go down there it is for the express purposes of actually physically working on the property. We have a 1000' of line fence to install, a drive access, a loafing shed, and 1000' feet of ditch that needs a clean-out over the next two years. We do all the moving of the cattle when it comes time to sell/buy, take the hay off our field, butchering etc.

At minimum we need $1000 of "income" (not profit) per year on schedule "F" to satisfy the county for the ag tax purposes, whether it's run as a business or a non-business licensed small farm operation. Had not thought about the second job deal, but I guess it is income that we would not normally have, and income due to all the work we put into it. While the $1000 is the minimum I honestly believe the potential is there for more income going forward if we can get some of these infrastructure things improved over the next couple of years.

[Karenrbw]

We own 74 acres about 240 miles from home. We make 4-5 trips a year to the farm to bush hog, burn pasture, fix fence, check wells, etc. Our CPA claims these trips on our taxes so we can deduct them from our oil income and pasture rent income.