Yes. While it's not required, it is SUPREMELY helpful to have all your business and personal expenses separate.
Yes. There's some misinformation going around that there's a $75 safe harbor the IRS doesn't care about, but in the case of an audit, it's been my understanding from other's experience that they care about everything. One person mentioned the de minimus when being audited for sales tax was $0.25, and that the focus was mostly on smaller and local businesses.
Do your best to keep an organized, and digitize them if you can.
If all you can manage is to stuff them all in one envelope then do that. But keep them, for 3 years (7 at the safest).
According to the IRS, 3 year generally. At most 7.
Receipts - things you purchased
Sale receipts - things you sold
Invoices
Tax Forms
Mileage log
See full IRS list.
Your main personal tax form (probably Form 1040)
Schedule F - Profit or Loss From Farming (most common)
Schedule J - Income Averaging for Farmers and Fishermen - If your year-to-year income varies a lot, usually so you aren't overly taxed in a high income year
Form 943 - Employer’s Annual Tax Return for Agricultural Employees - Your farm has W-2 employees
Form 4835 - Farm Rental Income and Expenses - You rent farm land/materials but generally don't participate in the farming there
Glad you asked! See a detailed answer here: Farm Product Tax Rates.
But as an overview:
As a Producer - half or more of your total $ sales & re-sales are typically from sales (you produced it)
0% tax exempt - Raw goods in their original form (can be packaged)
2% food tax - raw meats, secondary dairy, raw goods you bought from someone else, and food that you bought at full retail
Full retail ~7% depending on county - anything that has been Arranged, Combined or Heated by you (the seller)
As a Retail merchant - half or more of your total $ sales & re-sales are typically from re-sales (you bought it from someone else)
You cannot tax exempt anything, because you are not a Producer, even if you still produce things
2% Food tax - raw goods, or food you bought at full retail
Full retail ~7% depending on county - anything that has been Prepared, Arranged, Combined or Heated by you (the seller)
A Producer is someone who's sales (goods they produced) regularly make up half or more of everything they sell (sales & re-sales). Officially "50% or more of their gross dollar receipts come from goods they produced".
A Retail Merchant is someone who's re-sales (goods they bought from someone else) regularaly make up half or more of everything they sell (sales & re-sales). Officially, "50% or more of their gross dollar receipts come from goods they purchased for re-sale"
Being one or the other changes how you have to charge sales tax. See more detail here.
You can’t.
The IRS specifically lists it as something that you cannot deduct. There is no other form that sneakily allows you to claim that loss.
The reason is because you have already claimed everything that went into producing that animal on various tax lines:
1b - Re-sale purchases if you purchased them (i.e. chicks),
16 - Feed
31 - Veterinary, breeding and medicine
There is some exception – if the animal lost has been kept over a year, or over 2 years for cows and horses. If you lost them due to a federally declared natural disaster (i.e. Cat 5 hurricane killed all my cows) then you may be able to use Form 4684, Casualties and Thefts.
CCC Loans are loans from the Commodity Credit Corporation (CCC), which is a government owned corporation that offers credit for commodities.
They can be offered for a variety of reasons, but most commonly are to protect/regulate farmer's income from market variation. They also offer loans for conservation efforts or to assist in the promotion of US exports.
The two broad kinds of loans offered are Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs).
From an accounting/bookkeeper point of view, a few interesting things about CCC loans are that
You can put your commodity up as collateral and repay the loan with the commodity if you choose--assuming it meets certain quality standards and has been properly stored
If the interest rate changes, you repay the loan back at the lower interest rate, not the original one. Cool right? The only catch is you have to report the difference as income
Go to your local USDA or FSA office and introduce yourself.
You will be able to explain in detail your farm, your practices and your goals, and they will be able to inform you of what loans (or grants!!) might be a good fit and how to get them. They also will know what available both federally and state-wise.
USDA - Commodity Loan Rates - also lists out what commodities are covered
USDA - Ask the Expert: A Q&A on Commodity Loans with Shayla Watson
Shoot me an email at cashkeep.bookkeeping@gmail.com.
My goal is to collect and distribute as much knowledge about farm bookkeeping as possible. If you want to know it, I want to tell it to the world.
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