I have been studying and teaching agricultural taxation for my entire professional life and it still breaks my heart to see how much farmers and ranchers get wrong about their income taxes—rarely in their own favor.
The most costly and most common mistake I see is beginning farmers or ranchers who delay reporting their business activities on their tax returns. Whatever reasons they may have, they usually do not have complete information. They decide not to file because they know they do not owe taxes on their activities, but they do not consider that by not filing they are missing out on valuable deductions that can be used against future income.
Going back and filing returns for prior years can be a daunting task, but it may be necessary. One of the key resources in the Income Taxes Learning Center is the FarmLink Tax Organizer. It is designed particularly to help people who need to organize prior year records and file for the first time.
The learning center brings together beginning, intermediate and advanced materials on agricultural taxation because the reality is—most beginning farmers and ranchers actually have advanced tax issues from the very beginning.
The beginning-stage resources are particularly important for first-time self-employed farmers and ranchers. They can help you to determine if you need to report your farming, ranching or fishing business, or if you should report it—even if it is not required.
The beginning resources will also help you to understand what records the IRS requires you to keep.
The intermediate and advanced resources are for farmers, ranchers, and tax preparers with specific questions about agricultural taxation. It includes resources on asset transfers, conservation payments, and losses related to catastrophe or disaster.
For each section you will find diagnostic questions to help you determine if the materials are right for you, and then written materials along with video recordings.
I developed most of the materials in the Income Taxes Learning Center for the University of Arkansas School of Law LLM Program in Food and Agriculture. With funding from the American Rescue Plan Act, California FarmLink was able to bring these resources to a wider audience, and also to translate them into Spanish. You can find the Spanish language version of these resources at the Spanish-language Tax Toolshed.
From the Income Tax Learning Center you can easily navigate to FarmLink’s five other Learning Centers:
Business Basics Learning Center
This Learning Center includes resources for people who are thinking about creating a new business, and for people who have already started a business but have not yet researched required and recommended business management practices.
Business Planning Learning Center
This Learning Center is for established businesses that want to evaluate and strengthen their operations as well as for people thinking about starting a new business.
This Learning Center is for experienced bookkeepers who want to learn about best practices for farm and ranch books, and for farmers and ranchers who are committed to deep engagement with their bookkeeping.
Disaster Preparedness and Recovery Learning Center
Resources in this Learning Center will help users evaluate aspects of their business to strengthen, select the most effective risk management strategies, and prepare to be able to recover from disaster as quickly and effectively.
This Learning Center contains supplemental materials referenced in the other FarmLink Learning Centers. The best way to get here is from one of the other Learning Centers, but it can also be used like an encyclopedia of business management concepts and tools.
Poppy Davis serves as programs advisor with California FarmLink.
