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Farm Income Expense - Taxes

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Question
Farm Income Expense - Taxes

Answer

You can deduct the following taxes:

  • Real estate and personal property taxes on farm business assets.
  • Social security and Medicare taxes you paid to match what you are required to withhold from farm employees' wages.
  • Federal unemployment tax.
  • Federal highway use tax.
  • Contributions to state unemployment insurance fund or disability benefit fund if they are considered taxes under state law.

Do not deduct the following taxes:

  • Federal income taxes, including your self-employment tax. However, you may deduct one-half of your self-employment tax on Form 1040.
  • Estate and gift taxes.
  • Taxes assessed for improvements, such as paving and sewers.
  • Taxes on your home or personal use property.
  • State and local sales taxes on property purchased for use in your farming business. Instead, treat these taxes as part of the cost of the property.
  • Other taxes not related to your farming business.

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Views: 545 Created on: Jun 15, 2013
Date updated: Sep 21, 2015

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