Below are a few tax tips for anyone who owns or operates a farm:
- If your crops were damaged and you received insurance payments for the damages, that money counts as income. You must report it to the IRS.
- You can deduct ordinary expenses that are considered to be common in the farming business. Additionally, you can deduct necessary expenses that are considered necessary for business.
- You’re allowed to deduct reasonable wages paid to your full-time and part-time employees. Be sure to withhold Social Security, Medicare, and income taxes from your employee’s wages.
- If you purchased items for resale, such as livestock, you may be able to deduct the cost in the year of the sale, including freight charges for transporting livestock to your farm.
- If bad weather forced you to sell more livestock or poultry than normal, you may be able to wait on reporting the gain of the sale.
For more information, contact Michaelia Breuker at 231.924.8072.