Schedule F, Farms
Tax Preparation Checklist
Good Farm Business record keeping is more critical than ever with the size and scope of many growing farm businesses today. Schedule F is used to report profit and loss.
Well documented farm records help farmers to make critical financial management decisions.
Keeping your farming business records organized for critical evaluation will help you determine your resource use and efficiency for profit and loss evaluation. This can also help you evaluate the tax benefits that may apply to you and your business. See additional support Understanding Farm Records.
The Farmer's Tax Guide: IRS Publication 225, explains federal tax laws and how they apply to you and your farming business.
Year-End Farm Record-Keeping Checklist
Farm record keeping for income tax management will help you determine potential tax liability and allow you to perform accurate tax planning prior to the end of your fiscal calendar year. This also allows you to prepare the proper paperwork to obtain tax credits available for lowering your tax bill.
Farm Enterprise Accounting & Management
Keeping good enterprise records showing receipts and expenses for each farming enterprise individually with profitability analysis is invaluable. This will help you insure you are making sound investment decisions.
Accrual Income Statement
An accrual income statement is a helpful tool that measures the business profitability for the tax year.
Accrual Adjusted Income Statement
An accrual adjusted income statement combines the annual beginning cash basis farm records with the current inventories from the balance sheets (comparing the beginning and end of the year valuation) to give a true measure of the farms overall profitability.
The balance sheet is used to measure the farmers / operator’s level of equity or ownership in the business.
These statements should be prepared annually using the same time period from year to
year. Income statements typically cover a time period from January 1st through December
31st, whereas a balance sheet should be prepared as of year end or December 31st.
Tax management laws like Section 179 for depreciation deductions can help farmers ease the tax burden now, but may significantly increase future taxes for qualifying property.