Education Commons^™

Disaster Losses And Related Tax Rules, Jc Hobbs

Rural Tax Education

The dollar value of property losses due to fires, floods, tornadoes, earthquakes, lightning, freezes, etc. can be substantial. Federal income tax regulations often provide relief by allowing deductions for losses of both business-use and personal-use property. This fact sheet describes losses to property, the process used to determine if you have a deductible loss, how insurance proceeds and cost share benefits are treated, and how to reconstruct records to document a loss. Examples help explain the rules that apply to property found on the farm including buildings, machinery, livestock, feed, supplies, personal residence and the contents and personal vehicles. A …

Farm Losses Versus Hobby Losses: Farmers Must Plan Ahead To Avoid Adverse Tax Consequences, Jc Hobbs

Rural Tax Education

The hobby loss rules which determine whether a venture is a business or a hobby, is a frequently misunderstood area of tax law that causes producers who are experiencing difficult economic times to worry, perhaps unnecessarily, that the venture will be viewed as a hobby rather than a true business venture. This article is intended to provide information to help producers reduce the likelihood that the business venture will be deemed a hobby.

Self-Employment Tax, Gary Hoff

Rural Tax Education

Most taxpayers working for an employer have FICA and Medicare withheld from their wages. The amount withheld is matched by their employer. Consequently, they will receive retirement and medical benefits when they reach retirement age. They are also entitled to disability and survivor benefits. The self-employed individual must pay self-employment (SE) tax to be entitled to similar benefits. This is paid when they file their federal income tax return. The SE tax rates equate to both the employer’s and employee’s share of FICA and Medicare.

Filing Dates And Estimated Tax Payments, Gary Hoff

Rural Tax Education

When managing the cash flow of the farm or ranch, it is important to preserve cash as long as possible without incurring penalties or interest for late payments. The filing date of your federal income tax return is important, as payment can be a major expense that needs to be considered as part of cash-flow planning. To understand when you must file your income tax return, you must be familiar with three areas:

1. Filing deadline,

2. Estimated tax filing requirements, and

3. Estimated tax penalty.

Estate And Gift Tax, Jc Hobbs

Rural Tax Education

Individuals may be subject to federal estate and gift taxes when large transfers of property, money, or other assets occur. Estate taxes apply to the transfer of assets (money and/or property) to one or more individuals when the owner dies. Gift taxes are imposed on the transfer of assets to another individual during the owner’s lifetime. In addition, many states also have estate and/or gift taxes.

The Optional Method Of Paying Self-Employment Tax, Karli Salisbury

Rural Tax Education

A self-employed individual must pay self-employment (SE) tax on earned income to be entitled to receive social security benefits. These benefits include retirement, disability, and survivor benefits as well as Medicare coverage, all of which are important to agricultural producers. To qualify for these benefits, a producer must have contributed by paying self-employment taxes and earning the required quarters of coverage. For additional information about self-employment taxes, refer to the fact sheet “If You Are Self-Employed” in the Related Articles section found on the RuralTax.org website.

2012 Federal Tax Forms Used By Beginning Farmers And Ranchers, Jc Hobbs

Rural Tax Education

This article provides a list of business and personal tax forms and schedules which farmers and ranchers may experience when filing their annual income tax return. This publication does NOT cover the rules that apply for each of these forms. For a more complete list of forms and publications visit the IRS Forms and Publications website at: http://www.irs.gov/formspubs/article/0,,id=232801,00.html for the most current forms and publications.

Alternative Minimum Tax, Philip E. Harris

Rural Tax Education

Congress imposes the alternative minimum tax (AMT) on taxpayers to prevent them from combining several tax exclusions, deductions and credits to pay very little or no federal income tax even though they have significant income. When it was first enacted in 1969, the AMT affected only a few, very high-income taxpayers. Since it was first imposed, changes to the regular tax rules cause many more taxpayers to pay the AMT. This fact sheet gives a basic explanation of the AMT, some examples of situations that cause taxpayers to pay it, and some planning techniques to minimize the impact of the …