You are a farming business if you grow, operate or manage a farm for profit. A farm can include livestock, dairy, poultry, fish, fruits, vegetables, or nursery stock.
As with any for-profit business, there are several tax issues to consider when operating a farming business.
A good resource for farm tax information is the Internal Revenue Service’s 225 publication, The Farmer’s Tax Guide. This guide explains the need for good records, what needs to be recorded, and other information needed to run a for-profit farm.
The guide is offered as a comprehensive resource and aims to explain what expenses are taxable and how they should be documented throughout the year.
Everything from calculating farm income to deductible and non-deductible expenses and expenses for soil and water conservation, assets, gains and losses, losses and thefts, is covered in detail. Due to the weirdness of 2021, you might be wondering about farm taxes.
The 2021 Farmer Tax Guide is here to help you file your 2021 farm taxes and covers things like the Coronavirus Food Assistance Program.
The best part is that the tax guide is available to you for free.
You can download and print the guide from the IRS website, or you can go to the Cherokee County OSU extension office and pick up a copy.
Make sure you get it early so you can have all of your paperwork in order whenever it’s time to file.
If you have questions about farm taxes or the 2021 Farmer Tax Guide, come see us at 908 S. College Ave. in Tahlequah or call us at 918-456-6163.
Garrett Ford is an agricultural educator for the OSU Cooperative Extension Service in Cherokee County.