J.K. Lasser's Small Business Taxes 2013: Your Complete Guide to a Better Bottom Line

CHAPTER 20

Deductions for Farmers

Alert

At the time this book was printed, Congress had not extended numerous breaks for 2012 that had expired at the end of 2011. Check the online supplement in February 2013 at www.jklasser.com or www.barbaraweltman.com to see whether these breaks apply for 2012 returns.

Business owners engaged in farming activities may be entitled to special deductions not claimed by other businesses. These special deductions are in addition to the same types of deductions that other business owners enjoy. A farm includes stock, dairy, poultry, fish, fruit, and truck farms. Thus, it encompasses plantations, ranches, ranges, and orchards.

Farmers have been given these special rules in recognition of their unique business arrangements and to make their tax reporting easier. Some of these rules have been highlighted in other parts of this book. For example, farmers (other than farming syndicates) generally are allowed to use the cash method of accounting to report their income and expenses.

In this chapter you will learn about:

• Farm expenses
• Farm losses
• Farm-related tax credits
• Nondeductible farm-related expenses
• Where to deduct farm-related expenses

For further information about deducting farming expenses, see IRS Publication 225, Farmer’s Tax Guide.