IT’S TAX SEASON, for individuals and businesses, and I’m about to make a statement that won’t bowl over anyone: Tax season isn’t like the Christmas season; few people look forward to it and enjoy it.
That being said, it might be helpful to share and point to a few general tax tips that particularly are good for farmers. The idea is to make tax time — from data recording and collection through form preparation and filing — less confusing, less stressful, and less costly.
1. Writing for the Houston Chronicle, Angie Mohr says hire a qualified accountant. “A farmer’s best friend is her (or his) accountant, but it is critical to find one who is qualified. Tax rules for farmers can be significantly different than those that apply to other businesses.” (http://ow.ly/WOvUM)
2. It’s interesting to note the number and kind of small businesses that fall under the “farming” label for taxes. “For classification purposes, the IRS considers more than just ground tillers as farmers,” writes Bonnie Lee for FOXBusiness. “The IRS regards orchards, livestock, dairy, poultry, vineyards, ranches, ranges, and even fish as farming.” (http://ow.ly/WOxyl)
3. Keep detailed records of your income and expenses, and have a working knowledge of which expenses are and aren’t deductible. Along these lines, writer Rich Snell offers a couple of good lists on HobbyFarms.com. (http://ow.ly/WOzdh)
4. Average your income to reduce your tax liability. “This is one of the coolest exceptions that farmers can make on their taxes— a way of determining an average tax rate based on three years of income,” Kate Kershner writes for HowStuffWorks.com. (http://ow.ly/WOA2G)
5. And, from the IRS itself, there’s a heads-up about crop insurance. “Insurance payments from crop damage count as income.” (http://ow.ly/WOArq)
In the spirit of the holiday just past, here’s wishing you the merriest tax season possible and a jolly (low) bottom line on your tax liability.
column by BAXTER TROUTMAN
BIO: Baxter Troutman is founder and chief executive officer of Labor Solutions, a staffing company with offices in Bartow, Winter Haven, Lake Wales, and Arcadia. A cattle rancher and citrus grower who served in the Florida House of Representatives, Troutman understands the challenges and concerns of today’s farmer.