Schedule F: What farmers should know about reporting profits and losses
3 min read
February 01, 2021 • Block Advisors
There are many tax forms out there, especially when you operate your own business in farming.
How do you navigate your tax responsibilities and keep up with tax forms such as the Schedule F as a self-employed farmer–when you have a million other obligations outside of tax.
That’s why we’re here to help. This article will discuss the Schedule F tax schedule, including the purpose it serves, how to fill it out, when it’s due, and how to complete and send it.
When should you use IRS Schedule F and when is it due?
Use IRS Schedule F to report farm income and expenses. Schedule F is due when personal income taxes are due, on tax day. For individuals, it is included with your Form 1040 or 1040-SR filing. This date is typically April 15, unless it falls on a weekend or holiday.
Who should use the Schedule F tax form?
Farmers whose business is a sole proprietorship should use the Schedule F tax form. The following are considered farmers for the purposes of completing a Schedule F:
- Livestock, dairy, poultry, fish and fruit farmers
- Owners of plantations, ranches, ranges, nurseries or orchards
The Schedule F also reports other types of farming profits, like
- Crop insurance payouts
- Federal disaster payments
- Profits from a farming cooperative
- Payments from an agricultural program
What information does the Schedule F request?
The Schedule F is a tax business schedule that allows you to calculate your taxable income from farming. Your taxable income amount is then transferred to your personal tax return. This schedule should be included with Form 1040, 1040-SR, or 1040-NR.
The Schedule F also helps you if you have farming losses. Your tax deductions need to be ordinary and necessary farm business expenses. Common deductions include:
- Cost of livestock
- Equipment costs
- Depreciation to recover a portion of equipment costs
- Insurance premiums
- Interest paid during the year on farm-related loans
- Livestock feed
- Seeds and fertilizer
- Wages paid to contracted or W-2 employees
Your profit or loss reported on the Schedule F gets combined with non-farm income reported on your individual tax return. Depending on whether you have a farm profit or loss, it can decrease or increase your taxable income.
Where to go for more tax help?
If paperwork or tracking things like W-2 deadlines is not your thing and you’d rather get back to running your farm, we understand. That’s why we’re here. Rely on our team of small business certified tax pros to get your taxes right and keep your business on track.
Whether you are a full-time farmer, or small business owner in other fields of work, we can help.
Rely on our team of small business certified tax pros at Block Advisors to keep your business on track.