best place to get tax info on the cattle biz

[dieselbeef]

maybe a site with some good outlines and maybe a few insider tricks...all legal of course :roll: ...

my tax guy is always askin me something....one i remember was about paying tax on hiefers i was keeping back for myself...we bred them and then wanted to keep them...it was a gain but not a noticed one....i ferget what we did now but it seems like its always something bout that sorta thing...

its not too far from tax time again...


thoughts/?

 

[tom4018]

Are you saying you have to pay tax on the ones you keep? Our tax people also farm and I guess it helps us in that they are more experienced than we are. But they tell us that you pay tax on the ones you raise when you sell them either as feeders, bred heifers or cull cows. I hope they are right.

 

[dun]

What you need to find is a good accountant that knows the farming end of taxes. You should be asking him questions and getting correct answers not him asking you.

 

[cowboy43]

How can you get a good tax person when you can't get an answer from IRS. The laws have been amended so many times it would take a tax lawler to half a-- understand all of them, now its gonna be worst.

 

[dieselbeef]

no we didnt pay tax on the ones we kept..like u say only when recognizing a profit from them...
that was the first example that comes to mind tho

havent been able to find a tax agent that can help me with the farming thing. there seems to be enough of it round here but i guess i just havent found the right guy...my current guy does me good i think...but i would send him to a place for better learning if i knew of one ....for both our benefits cuz id be fer sure readin up on it myself

i was thinkin there might be a website i could look at or something

 

[tom4018]

no we didnt pay tax on the ones we kept..like u say only when recognizing a profit from them...
that was the first example that comes to mind tho

havent been able to find a tax agent that can help me with the farming thing. there seems to be enough of it round here but i guess i just havent found the right guy...my current guy does me good i think...but i would send him to a place for better learning if i knew of one ....for both our benefits cuz id be fer sure readin up on it myself

i was thinkin there might be a website i could look at or something

If you know of anyone else that farms ask them who does their taxes. That is how we found ours, they do more than just taxes they do payroll for some small businesses too.

 

[3waycross]

My tax guy is a ranch and farm specialist. He's not cheap though! Of course he wouldn't do yu much good on state tax but he know the federal stuff.

 

[dieselbeef]

i noly need federal..we got no state or local thank god

 

[3waycross]

i noly need federal..we got no state or local thank god

He would most likely help you for a consulting fee. He's really good.

 

[West Dakota]

I'm not 100% sure, but I don't think you pay taxes on raised replacements until you sell them, and then it's at a different tax rate, than steers, for instance.
My bred heifers go under form 4797, along with raised heifers with intention to sell, cows and bulls sold after intended use. (after they're open or old)
Not sure what everyone else pays, but I pay about $400/yr for tax prep. And it's worth it, all I do is present him with 1099 info, income and expenses. He's gotten me refunds from previous years, because they changed the laws the following year!

Good luck finding info on the net! ;-)

 

[dieselbeef]

yeah..aint been lucky so far..thats why i posted it here...whats out there is alot of reading to find what ya need

 

[1982vett]

Here ya go Diesel...Farmers Tax Guide.

http://www.irs.gov/pub/irs-pdf/p225.pdf

In general, an individual using cash basis (accrual may be different) doesn't realize income until the product raised is sold. Expenses or ordinary operating expenses are deductable the year they were realized. Prepaid expenses and depreciable items are the exception but then you have section 179 rules that play into that mix also.

Clear as mud now huh?

 

[dieselbeef]

very nice sir..thank you..i will keep that link so i can peruse at my liesure...

gary

 

[1982vett]

very nice sir..thank you..i will keep that link so i can peruse at my liesure...

gary

:lol: It can get a bit confusing because it addresses many different situations. If a particular situation doesn't apply, don't try to take that and apply it to yours. That's how it gets muddy. Look for the situation that does fit you, it is most likely in there somewhere.

 

[farmwriter]

Thx 82vett! I'm saving the link, too.

 

[1982vett]

Just got thru nosing around a bit. Turbotax (There are others as well) has an online version of their software that lets you explore it a bit before buying. You might follow their interview instructions and get some guidance there also.

 

[jkwilson]

I do my own, and think I understand it pretty well. Still a PITA, and I've not come across a preparer or accountant that I'd let touch my taxes since I started. H&R Block caused me no end of trouble and almost cost me $1300 on some carryover conservation expenses.

The Catch-22 is that if you don't know how to do them yourself, you can't tell if you are being hosed, and worse yet, you can't make decisions that will help you out.

Depreciation and recapture are boogers, and the idea of not deducting purchased cattle until the year you sell them trips a lot of people up. You end up with a big deduction one year, and then end up owing on the sale the next.

I had an accountant tell me once that if you aren't sure about what the instructions mean, and couldn't get a straight answer from the IRS, to make a note of how you interpreted them or what your method of figuring it was. That can help sway an auditor to waive a penalty if they understand what you were thinking when you did it.

 

[dieselbeef]

i used to use urbo tax but it took me 6 or 8 hrs to do it so i hired it out...firend of the wifes does good job i thin but he just is always askin so i wanted to find out more.

i always thought i was takini more than i was sposed to and that worried me also..no one ever asked but i have made a few mistakes..at least this way it on the the preparer and not me....a

after reading most of that tax link i think im doin pretty good now

thanks to all tho..i thought this would be a good topic