If in your business activities, you make payments of $600 or more during the year to an individual or partnership for interest, rent or service, you are required to file an information return with the IRS. Copies of these information returns, known as 1099's, must also be given to the recipients of the payments.

This includes payments for services performed by people who are not your employees, such as self-employed subcontractors, breeders, Vets, carpenters, hired boy, pasture/machinery rent, etc. 1099 Forms are not needed for merchandise or materials or if the service is incidental, such as delivery trucks.

They are also not needed for payments to companies or things like feed, fertilizer, interest paid to banks/financial institutions or for non-business loans.

There are many deductions you can take on your taxes for certain items. Capitalized Expenses or Depreciable Items are items that generally cost more than $250 and last more than 1 year.

Farmers can depreciate most types of tangible property –– except land –– such as farm buildings, silos, greenhouses, machinery, equipment, vehicles, livestock, draft animals, cows, overhauls, major repair jobs and furniture. Some expenses can be either depreciation or supplies/repairs and you and your tax preparer can decide what is the best option. 

Personal expenses such as food, groceries, cloths, dry good, personal furniture, etc, are not deductible on your income tax return, the government gives you an amount you can make without paying taxes for these items. Some people like to keep track of these items for their own information.  

It is our job to help you determine what is taxable and what is not. Don't hesitate to ask and give us a call today for more information. 

Itemized Deductions are expenses that may help to lower you taxes depending on your tax situation. First, they only count for Federal (IRS) taxes, not state or local. If you don't pay anything to the IRS they will not help. Second, you must have enough of them, for example doctor bills need to be at least $10,000 if married.

You want to keep track of these expenses for your own information and your tax preparer can let you know if they will help you lower your taxes.

Keep track of doctors, dentist, eye glasses, hospitals, transportation to/from, prescription medicine & drugs, contributions to church/fire company, gifts to charity, bad debts, and job related costs. Make a total of each separate category