Tax tips for U.S. farmers

Feb 12, 2016

Five tips to make tax season a little easier

By Diego Flammini
Assistant Editor, North American Content
Farms.com

Unfortunately, tax season is right around the corner, and to date, there appears to be nothing that can be done about it.

However, there are things that farmers in the U.S. can do to ensure they’re as prepared as possible when having their taxes done.

Ed Maxwell, a tax specialist with Farm Credit East in Cobleskill, New York, outlined five pointers for farmers to consider before their taxes are prepared.

Farm Credit East

“Have good records first and foremost,” he said. “If the client doesn’t have good records they’re going to be shooting in the dark. There’s nothing tax-wise we can do for them if they don’t have good records.”

Maxwell’s second tip refers to who farmers decide to prepare their taxes.

“Get in touch with an ag-specific tax preparer,” he said. “Because there are so many different rules for ag businesses compared to general businesses. Agriculture has a lot of tax-code specific things that general tax preparers may not spend much time on.”

Tip number three relates to income averaging.

“Farmers are allowed to average their income,” Maxwell said. “If they had a successful year they can spread it over the three previous years and take advantage of lower tax brackets.”

Maxwell’s fourth tax tip for farmers is about fuel credits.

“If they’re using gas for off-road vehicles (ex: tractors, combines) on the farm and paying all the taxes up front on the gas they can get that returned,” he said. “There’s highway taxes in the price of gas and they wouldn’t have to pay that.”

The fifth tip is about farmers using the estate and gift tax exemption.

Maxwell said an individual farmer can leave $5.45 million to their families without paying any federal estate or gift taxes. A married couple can leave up to $10.9 million tax-free.

Need more tax tips? The IRS has a list of 10 things farmers should know about income and deductions.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.