If you're a farmer, this list of possible deductions is a must have for ensuring you're deducting all you can on your taxes as well as some examples of items that qualify for in each deduction category. For additional guidance on what you could be deducting, call us and set up an appointment today!
Sales and Rent
- Sale of livestock, sale of grains and produce raised or purchased for resale, government subsidies, pasture rent
- Receipts for your accounting kit, computer programs, tax preparation, accountant fees, apps
- Business cards, testing, brochures, social media
- Fees charged by banks to maintain an account, wire fees, ATM withdraw, or other bank services
- Services and supplies
- For crops and pest control
- Money paid to children for helping with such things as delivering flyers and/ or product, stuffing envelopes, cleaning office and/or car, modeling. Must keep a detailed log of tasks and how paid.
- Commissions to sales people, or anyone who gets paid by a percentage of sales or work done.
- Cost of crops or livestock purchased then resold
- Cost to ship crops and/or livestock
- Dues to professional organizations and magazines that have to do with your trade or business
- Classes, seminars, trade show, and/or fairs
- Larger tools that last longer than 3 years: compressors, trailers, tractors, welding equipment, etc. that cost over $500
- Diesel, gas, propane, wood, and coal
- Any outside labor hired to do planting, harvesting, repairs, feeding or maintenance
- A separate room in your home to do business and accounting. A percentage of utility bills, home owners or renters insurance, property tax, mortgage interest, refinance fees, repairs and maintenance, cleaning supplies, office decor, etc may be taken. It is determined by square footage of office space vs square footage of the entire house
- Liability, vehicle, property, in some cases key man life
- Gifts to clients and associates limited to $25 per person per year
- Cleaning fees for special farm protective clothing
- Attorneys, accountants, appraisers, and/or certification expense
- Machines and equipment you rent for short period of time for a one time job
- Machines and equipment you lease but keep and use all the time
- Meals with clients, potential clients, and associates. Note: entertainment is no longer deductible
- Fees to process livestock for resale
- There are two ways to take a vehicle expense. If you choose mileage, you take the mileage used when picking up product, supplies, office supplies, meetings, handing out advertising or business cards, meals with clients, etc. The second option is Vehicle (see Vehicle deduction).
- Office supplies, forms and receipt books, computer supplies, Internet, postage, etc.
- Pastures, land, and buildings
- Any equipment, office furniture, computers, vehicles that cost over $500
- Repairs and maintenance to equipment, buildings, fences, and/or irrigation that do not increase the value
- Purchased for producing products to sell or for feed
- Fees to enter shows and Fairs
- Things you use to run your farm: small tools, filters, buckets, containers, cleaning etc.
- Business, professional, state and city licenses. Taxes on property, payroll, and sales tax
- Cell phone, phone lines into home for business, fax, Internet
- Small tools under $500 that the last less than 3 years: hammers, screwdrivers, saws, etc.
- Hotels, airfare, cab fare (ex. Uber or Lyft), public transit, parking, cleaning while away from home, business trip log, bus, train, etc.
- There are two ways to take a vehicle expense. If you choose vehicle, you take the expense using the vehicle: fuel, parts, mechanics, oil changes, car washes, insurance, etc. Along with taking the vehicle expense you can also depreciate the vehicle. Note that unless the vehicle is used solely for the business you must track business use vs. personal use. The second option is Mileage (see Mileage deduction).
- Any service performed by a veterinarian, including medicines