As we approach the tax filing deadline, I thought this reminder checklist from the IRS may be useful. If you have already filed your return, you may want to double check to be sure these items were considered as part of your return you filed. If you earn money managing, working on, or owning a farm, you are in the farming business. Here are 10 things about farm income and expenses you should know as outlined in IRS notification IRS Tax Tip 2013-41.
1. Crop insurance proceeds
Insurance payments from crop damage count as income. They should generally be reported the year they are received. However, if you use the cash method of accounting and receive crop insurance proceeds in the same tax year in which the crops are damaged, you can choose to postpone reporting the proceeds as income until the following tax year. You can make this choice if you can show you would have included income from the damaged crops in any tax year following the year the damage occurred.… Continue reading