J.K. Lasser's Small Business Taxes 2023

CHAPTER 20Deductions and Tax Credits for Farmers

• Farm Expenses
• Interest on Loans
• Qualified Business Income Deduction
• Farm Losses
• Farm‐Related Tax Credits
• Nondeductible Farm‐Related Expenses

Alert

At the time this book was published, Congress was considering tax changes that could affect 2022 tax returns and planning for 2023. Check the online Supplement in February 2023 at www.jklasser.com or www.BigIdeasForSmallBusiness.com to see what changes have been enacted and when they become effective.

The U.S. Department of Agriculture 2017 Census (the next census begins in November 2022) reports that there were more than 2.04 million farms in the U.S. 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, there are some special income rules for farmers (Chapter 4) and farmers (other than farming syndicates) are generally allowed to use the cash method of accounting to report their income and expenses regardless of the amount of their gross receipts. They ...