Farmers List | Farm Mailing Lists, Ag Email Lists – US Farm Data Blog. Need information on farmers list or anything relating to farms, farming, farmers and Ag industry? We have all that for you. Contact US Farm Data today.

How the Tax Code Works to Protect Farmers

, , ,

Farmers, like most people, want to protect their income as the deadline for filing taxes approaches. One of the most important ways for farmers to do this is to understand the best ways to decrease their tax liability.

Knowing that you need to decrease your tax liability and actually doing it are two drastically different things, however. In order to decrease your tax liability you must understand just what are considered allowable expenses and how to report those expenses.

In most cases, farmers are considered by the IRS to be self-employed. Therefore, they will report income on Form 1040 and then file the schedules that go along with that form. Self-employed farmers, or single-entity limited liability corporations, report income on Schedule F. By reporting income on Form 1040, farmers are able to use the cash method of accounting as opposed to the accrual method. The cash method means that expenses and income are claimed in real time.

The tax code for farmers is different than other businesses in that it incentivizes farmers for investing back into their farms. While most farmers are aware of how the tax code works, many times it remains in their best interest to work with an accountant who is familiar with the specific issues that surround farming operations. Such a tax professional also will be able to check and double check that farmers do not overpay in taxes.
One of the most surprising issues farmers face when filing taxes is proving that they are, in fact, operating a farm. There are various provisions in the federal tax code that define what is considered a qualified farm. To make matters even more complicated, state and local definitions of what exactly a farm is may vary, as well.

What follows are some general guidelines that ensure a farm is considered as such:

  • It shows a profit every three to five years.
  • It is operated in a business-like manner and the farmer who owns it is knowledgeable of farming practices.
  • Farmers list personal money and farm money separately.
  • Farm work and activities are well-documented.
  • Proof is provided that any losses are due to legitimate reasons.

These guidelines, while specific, are not meant to penalize farmers. Rather, they are in place to protect legitimate farmers. In fact, if anything, the tax code is written to benefit farmers and decrease their tax burden.

Spring Checklist for Farm Equipment and Machinery

, , ,

You might not know it to see all the snow still on the ground in some parts of the country, but spring is upon us. And as farmers ready themselves for long days, they first should make sure that their equipment and machinery is tuned up and ready to go.

Not only will keeping farm equipment well maintained help to extend its life, it also will make sure that everyone who uses that equipment remains safe. What follows is a list of what farmers need to check before they put their equipment to work.

  1. Lights and flashers. Flashers and turn signals need to be tested to make sure they are working correctly. Emblems need to be clean and any worn down ones replaced.
  2. Shields and guards. Check your PTO drive-line shields. Shields should turn freely and independently of the drive line. Further, to ensure maximum protection, the drive-line shields, tractor master shields and corresponding implement shields need to be in place.
  3. Hydraulic systems and mechanical locks. Check all hoses, fittings and seals and replace worn pieces.
  4. Tires. Check that all tires are inflated properly and that bearings are properly lubricated.
  5. Sprayer and planters. Hoses, valves, fittings and all other components must be free of leaks. Any tanks should have tight covers so spills are avoided.
  6. Hitch pins. The locking hitch pins on tractors and implements must be checked to guarantee that they are secure and in good working order.
  7. Steps and platforms. Always keep equipment platforms and steps clean so that no one slips and falls when entering, exiting or standing on equipment.

No matter what make or model of equipment you own, make sure you are familiar with the owner’s manual. This ensures that you will have all the information necessary for its particular service and maintenance requirements.

Getting your tractors and other equipment ready for spring doesn’t need to take a long time but it will pay off in the long run. After all, there is nothing worse than being slowed down by a breakdown after work has begun in the fields and around the farm.
Finally, it is always a good idea to have a strong relationship with your equipment dealer. That way if there is a major issue with your equipment you have someone to turn to for help instead of scrambling to find someone at the last minute.