Wednesday, March 26, 2008

Farming and the IRS

Since I have been working at Effectur, I have learned a great deal about tax returns, and the guidelines with the IRS. When it comes to the IRS, there are even guidelines for farmers, fisherman and certain higher income taxpayers. Did you know that if at least two-thirds of your gross income for 2006-2007 is from farming or fishing, substitute 66 2/3 % for 90%.
Your gross income is all income you receive in the form of money, goods, property and services that is not tax exempt from tax. To determine whether two-thirds of your gross income for 2006 was from farming or fishing, use as your gross income the total of the income (not less) amounts.
On a joint return, you must add your spouses gross income to your gross income to determine of at least 2/3 of your total gross income is from farming or fishing. Gross income from farming is income from cultivating the soil or raising agricultural commodities. It included the following amounts:

* Income from operating a stock, dairy, poultry, bee, fruit, or truck farm
*Income from a plantation, ranch, nursery, range, orchard, or oyster bed
*Crop shares for the use of our land
*Gains from sales of draft, breeding, dairy, or sporting livestock

If inquiring about answers pertaining to farming and how to prepare your returns, contact your local tax consultant for the latest 2007 filing requirements !

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