How much money can I save on my taxes having a hobby farm?
I bought and old dairy farm last June and I have a couple animals. I new to filing taxes for a farm and how much can you save using farm tax and what forms do I need and what do I need to look for? I also bought a tractor and a truck can use those for farm tax write off? Any tips will be helpful. thanks
considering how much money it takes to fix up and run an old farm, fences, barns, waters, vet bills, which is never ending, it's amazing that there is any money left over.
Anyway: Contact your Farm Service Agency in your county or (gasp) the IRS, the IRS has a form specific to farming. This form will walk you through what you can and can not use as deductions.
March 1st, 2009 at 3:51 am
It all depends, on the number of animals, the type of animal, and what you paid for them.
Farm animals depreciate similar to cars, and you can claim that depreciation – along with any farm expenses – as a loss on your taxes. You must show that you are operating the farm as business.
However, you can only do this for 7 years. After 7 years, your farm is declared a "hobby" and no longer a tax writeoff, unless you can make it turn a profit.
Generally, you'll need your average 1040, and then schedules A, B, and F to file with it. Some will also need Schedule J. It all depends on your farm.
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Lived on a farm a long time
March 1st, 2009 at 4:31 am
You save nothing having a hobby. With a hobby, if you make a profit, you pay tax on it, but if you lose money, you cannot deduct it. A business lowers your taxes only if it is something you do for the purpose of trying to make a profit, not as a hobby or purely for tax purposes.
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March 1st, 2009 at 4:40 am
Nothing. The worst you can do is zero out income.
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March 1st, 2009 at 4:52 am
None if it's a hobby – deductions are limited to the amount of income you report from the hobby.
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March 1st, 2009 at 5:19 am
considering how much money it takes to fix up and run an old farm, fences, barns, waters, vet bills, which is never ending, it's amazing that there is any money left over.
Anyway: Contact your Farm Service Agency in your county or (gasp) the IRS, the IRS has a form specific to farming. This form will walk you through what you can and can not use as deductions.
References :
doing it for 12 years