Tax Topics

Essentially all farmers, ranchers, and other agricultural producers must file a federal tax return and pay federal income and/or self-employment taxes on their net profit.

A taxpayer may want to modify their tax bill either higher or lower at the conclusion of the year. This fact sheet will walk through a couple of provisions that allow them to make those modifications.

This article will share steps a farmer/rancher can take to get the best value from that service and ensure a strong working relationship with their tax professional.

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 is...

If I promised you $1,000 today or offered to give you $1,250 in five years, would you wait? What factors are important as you decide whether to take money today or wait? How would you decide whether taking a costly action today was going to be worth it in...

Income tax management is not minimizing total taxes owed, but rather maximizing after-tax net income over the lifetime of the business.

There are two provisions in tax law that attempt to cushion producers from the consequences of adverse weather-related livestock sales.

Farmers and fishers experience significant variations in income from year to year, which causes their taxable income (and taxes owed) to fluctuate. To help these farm businesses smooth out swings in income and reduce overall tax liability, the Internal Re...

This article addresses the tax consequences of receiving life insurance payments, property insurance payments related to the farming operation, and handling involuntary conversions.

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...

Income tax rules apply to expenses that are incurred and paid before a business exists. These expenses are referred to as “start-up expenditures” or “start-up costs.” The IRS provides guidance relative to the deductibility of these start-up costs for any ...

Basis is a term used to describe the initial investment made in an asset, typically a capital asset. Over time, the basis can increase or decrease, depending on the circumstances and asset type.

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.

This publication will break down federal estate and gift taxation into its basic components, which will include estate taxes, gift taxes, lifetime exclusions, annual exclusions, and portability of the deceased spouse’s unused estate tax exclusion.

The Inflation Reduction Act (IRA), [P.L. 117-169], included a provision under section 22007 of the Act authorizing USDA to address issues of past discrimination in the Department’s farm lending programs. Under the resulting program, the Discrimination Fin...

This publication discusses the round of IRA payments announced in late 2023 for distressed guaranteed borrowers and subsequent decisions that farmers and ranchers will need to address in light of these USDA payments and any corresponding 1099s issued. Thi...

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 vi...

This article will introduce depreciation and depreciation calculations. Additional articles are available at ruraltax.org that provide more in-depth information regarding the items listed above.

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.

A self-employed individual must pay self-employment (SE) tax on earned income to be entitled to receive social security benefits. These benefits include retirement, disability, and survivor benefits as well as Medicare coverage, all of which are important...

The use of family labor in the farm or ranch operation can pose a number of challenges for farm managers as they try to sort through the vast quantity of regulations.

There are some conditions that will allow income from farming and ranching to be exempt from federal income and self-employment taxes for farming on trust property. However, not all tribal members will meet those conditions.

Passive activity loss rules are the focus of this fact sheet. Beginning farmers and ranchers should be aware of the requirements of materially participating in a business in order to avoid the passive activity loss rules.

Taxpayers may be allowed to deduct the costs of prepaid purchases in the year that the purchases are made, rather than the year in which such items are used. This article will give more information about prepaid farm expenses.

Knowing the deadline to file your federal income tax return is important, as late filing can generate penalties. In addition, taxpayers should know when tax payments are due because payments can be a major expense to consider in cash flow planning.

This article gives a basic explanation of the AMT and some examples of situations that cause taxpayers to pay the AMT.

This publication presents the basics of the 2022 farm loan immediate relief program, the tax consequences, tax management methods to consider, and farm management considerations. Additionally, this publication updates, with possible options to consider, d...

The dollar value of property losses due to fires, floods, tornadoes, earthquakes, lightning, freezes, etc. can be substantial. Federal income tax regulations often provide relief by allowing deductions for losses of business-use property.

De minimis safe harbor is the focus of this fact sheet. The de minimis safe harbor provides a tax planning opportunity which can be used by farmers and ranchers to simplify their accounting and annual records.

This fact sheet reviews the IRS Form 1099-G and provides examples of various federal government programs which may be reported to farmers and ranchers over the course of their respective business operations.

This article is an overview of tax deductions for the farm business.

The purpose of this fact sheet is to discuss and illustrate correct income tax reporting when business assets are sold.

The Inflation Reduction Act of 2022 was signed by the President in August. The act, through Section 22008, repealed the Farm Loan Assistance Section 1005 of the American Rescue Plan of 2021 (ARP). Section 1005 of ARP was replaced with Section 22006, Farm ...

Choosing the right accountant or tax return preparer can be a crucial decision for farmers, ranchers and forest landowners. Part of this important decision is based on personality, but there are some key questions that should be asked of potential (and ma...

USDA-FSA from the Inflation Reduction Act is providing program payments for debt relief to farmers that are in financial distress.