Surviving Tax Day on the Farm


| 5/1/2014 3:14:00 PM


Tags: Taxation, Farm, Agriculture, Finances, Taxes, Joe Fortunato,

Joe KnowsEach year, like every other farmer, I face a slew of tax codes that are difficult to navigate and estimate. The ups and downs of the seasons make predicting taxes difficult, but this year I did a few things differently that made it a lot easier when tax time rolled around.

Hiring My Kids

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Image via Flickr by WillowGardeners

My kids work hard on the farm, so paying them isn't a stretch. I want them to grow up with the family mentality that includes pitching in and not expecting to be paid for every chore, so the wages I pay can go toward their car insurance or into retirement or college funds. I can also deduct their farm clothing costs if it is something they need for their jobs.

In order to get a tax break and show reasonable expenses, I have to keep records of the work they've done. The IRS doesn't see a difference between me hiring neighborhood kids to help out or my own kids, so I choose to combine the values I'm teaching my own kids about hard work with the valuable breaks I can receive from the IRS when I invest money into my kids' futures. It's a win-win for us.

nebraskadave
5/4/2014 8:42:35 AM

Joe, in this day tax savvy knowledge is a precious commodity. For me it's a simple task at tax time. Since I'm single and have no deductions other than house mortgage interest and charitable contributions, I'm dangerously close to not being able to go long form. In the not too distant future, the mortgage interest will not be enough to heft me over the edge. My mileage trips for help with disaster organizations has been curtailed due to caring for family members enough to require me to be home but not enough to be a tax deduction. The IRS seems to know exactly where to put the cut off so that I don't quite get there. ***** Farms deal with huge dollar figures for operation and management costs, so I can see the wisdom to be educated in the tax laws. I hope that you will navigate the codes this year to only pay what you are required to pay. ***** Have a great tax day on the farm.





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