What if you make money?

hr3 · Apr 29, 2011

Cash.. Sell a cow get cash!!! Sell some hay get Cash !! Don't talk about it on the internet.. Don't tell you friends.. If your going to sell 50 cows a year start a business.. Other than that keep the money where it belongs..

My 2 cents.. " And if you tell anyone I'll have to pay taxes on that 2 cents"..

whistlepig · Apr 29, 2011

As suggested get a good accountant that understands farming. It's not worth the risk. Better to start it off right in the beginning. If you try to make things right later down the road the IRS is going to want back taxes and then you will be on their radar screen the rest of your life. If you make income you are obligated to report the income. And this certainly entitles you to some deductions for the money you made for the IRS. A good accountant makes this painless and worry free.

jmpbuffalo · Apr 29, 2011

KTurner said:
This doesn't quite sound right. If that were the case, the tax man should only tax my paycheck that is "profit", not the portion of the paycheck that goes to feed/shelter/cloth me and my family. And we all know that's not the case

Keith

"the portion of the paycheck that goes to feed/shelter/cloth me and my family" would be deductible if you could convince the taxman that raising yourself and your family was a "business!" (if you could only sell those durn kids for a profit!):laughing:

whistlepig · Apr 29, 2011

JakeBrake said:
The basic version of Turbotax will step you through the process. Just answer the questions as it asks them. Almost all questions will offer detailed explanations if you don't know the answers.

IRS requirements for many years have been that a farm must show a profit in 3 out of 5 years to be classified as a business. In other words you can deduct all your expenses, including depreciation for the first two years without much chance the IRS will question anything within reason. After that you will have to show a profit or you will become a hobby farm and can deduct expenses only to offset any any income you may have and you may have to reclaim your depreciation.

It is true that a farm must show a profit in three out of five years to be declared a business. This is a much more favorable tax bracket. If the three year profit stipulation isn't met then back taxes will be owed. And on the IRS radar screen you are. Regardless of being able to declare a place as business or not if you declare income you are entitled to deductions whether classified as a business or not. And that is forever. Good accountants can custom tailor the tax setup on a part time farm. We pay $135.00 a year to have a CPA do our taxes every year. I consider that a bargain. He will save me much more money that every year and it will be worry free

Danner · Apr 29, 2011

Cash.

638 · Apr 30, 2011

Cash and/or barter.

whistlepig · Apr 30, 2011

I had someone threaten me once on a cash/barter deal to turn me in to the IRS if I didn't give them a better price. If that's the way you like to do business go for it.

Danner · Apr 30, 2011

whistlepig said:
I had someone threaten me once on a cash/barter deal to turn me in to the IRS if I didn't give them a better price. If that's the way you like to do business go for it.

That's beyond stupid. How could that person know whether or not you would declare the income or services at year end. He needed to have his *** kicked for saying something like that

whistlepig · Apr 30, 2011

Danner said:
That's beyond stupid. How could that person know whether or not you would declare the income or services at year end. He needed to have his *** kicked for saying something like that

Wouldn't have been his problem. It would have been mine. Believe me, they are out there.

pat32rf · Apr 30, 2011

Up in these parts, if you have a good accountant you will never make enough profit to have to pay very much tax by the time you write off all your expenses. Your biggest problem will be saving all your paperwork involved in those expenses....