Ag Business Tax Materials

Farmers, ranchers and other agricultural producers and Extension educators will find resources for agriculturally related income and self-employment tax information that is both current and easy to understand. Tax issues are important for agricultural operations because income and self-employment taxes are a major cost and also because more and more USDA programs are being linked to a producer’s federal income tax return.

These materials are for supplemental use in classes. If you choose to use these materials, please fill out this short survey. 

Materials*:

• Introduction to Agricultural Federal Tax Issues: Essentially all farmers, ranchers, and other agricultural producers must file a federal income tax return and pay income and/or self-employment taxes on their net profits. There are special rules for producers who qualify as farmers.
  • Article (3 pages)
  • Webinar (1 hour 10 minutes)

• Farm Losses versus Hobby Losses: The hobby loss rules which determine whether a venture is a business or a hobby, is a frequently misunderstood area of tax law that causes producers who are experiencing difficult economic times to worry, perhaps unnecessarily, that the venture will be viewed as a hobby rather than a true business venture.
  • Article  (4 pages)
  • Webinar (45 minutes)

• Farm, Farming and Who's a Farmer for Tax Purposes: Meeting the qualifications of farming and being a farmer under the Internal Revenue Code (IRC) allows for special benefits; however, not all agricultural producers meet these qualifications even if they are producing agricultural products, which is why it is vitally important for operators of farms and their tax professionals to understand the IRS tax definitions of farm, farming, and farmer.
  • Article (7 pages)
  • Webinar (1 hour)

• Form 1099 Information Returns: Form 1099 is used to report various forms of income other than wages, salaries, and tips to the Internal Revenue Service (IRS) and to the recipient of the payment. Agricultural producers may both receive Form 1099 information returns and be required to issue them. The Form notifies the IRS and the recipient of the payment. The IRS will then look for the amounts from the Form 1099 to show up on the recipient’s Federal tax return. This article covers many 1099s that producers may encounter.
  • Article (12 pages)
  • Webinar (1 hour 12 minutes)

• Depreciation: An Introduction: These materials will introduce depreciation and depreciation calculations. Additional articles are available at ruraltax.org that provide more in-depth information regarding the items listed above.
  • Article (10 pages)
  • Webinar (1 hour 3 minutes)
  • Webinar on Depreciation Tax Law Changes for 2025 and 2026 (55 minutes)

• Self-Employment Tax: Most taxpayers working for an employer have FICA and Medicare withheld from their wages. The amount withheld is matched by their employer. Consequently, they will receive retirement and medical benefits when they reach retirement age.
  • Article (6 pages)
  • Webinar (43 minutes)

• Working with a Tax Professional: These materials will share steps a farmer or rancher can take to get the best value from that service and ensure a strong working relationship with their tax professional.
  • Article (3 pages)
  • Webinar (1 hour 5 mintues)

• Tax Issues for Grants: In recent years, several states and the federal government have made new grant programs available to farmers and for-profit farm and food businesses. In most cases, the funds from these grant awards are taxable income.
  • Article (6 pages)
  • Webinar (1 hour 11 minutes)

• Tax Planning for Farmers: These materials provides an overview of tax management and planning concepts, plus where to find additional information.
  • Article (5 pages)
  • Webinar (1 hour 18 minutes)

• H.R. 1, One Big Beautiful Bill Act (OBBBA) Tax Update Affecting Farms and Ranches: What is found in these materials is an interpretation of what is found in the OBBBA legislation. 
  • Article (5 pages)
  • Webinar (1 hour 5 minutes)