Importance Of Keeping Records For Filing Taxes On The Ranch/Farm

Dec 15, 2015

By Shannon Sand

While most people must file taxes by April 15, 2016, farmers’ and ranchers’ taxes must be filed by March 3rd. Due to the filing deadline many producers are beginning the process of gathering their important paper work.

In general, the law does not require any specific kinds of records (there are a few exceptions though). A producer can choose any kind of record keeping system they wish to use for their business (ex. Quicken, QuickBooks, Easy Farm, paper ledger, paper journal etc.). The IRS and the Farm Financial Standards Council encourages an accrual accounting method for record keeping, producers however can also use cash.

Record Keeping Systems: What to consider

The record keeping system should include a summary of all business transactions. It is imperative producers also keep supporting documents such as purchases, sales, payroll, invoices and other transactions taking place in the business. The reason why it is so important to keep these documents is that they support the entries listed in journals, ledgers, and tax returns. It is important producers keep these records for three years from when the tax return was filed (however, some records may need to be kept longer).

Benefits of accurate records

There are added benefits to keeping accurate records. Keeping accurate records allow producers to monitor the progress of their business, and show whether it is improving, which items are profitable, and what may need to change. Records help producers keep track of deductible expenses, as there may be many throughout the year and trying to remember them all might be difficult. Good record keeping makes preparing tax returns easier, and supports items reported on tax returns.

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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.