Farming and Ranching as a business

[HMK]

I wasn't sure which forum to ask this question. Hope this one is ok.

I am just starting out and need a little business advice. I made my first sale today from some tomato plants that I grew out from seeds. How do you guys keep track of your income and expenses? I was figuring on keeping 2 cigar/shoe boxes. One for income and one for expenses and using a computer program to keep track of it all. Do any of you do your own taxes or take it to someone?What about equipment? How is that depreciated? As you can tell, I am not big time. Just trying to get a start.

 

[Caustic Burno]

Ledger book record all sales and expenses, all reciepts are kept for the CPA.

 

[backhoeboogie]

It also helps me to have a checking account for farm purchases/deposits only.

 

[fit2btied]

Might want to check into business permits/licenses and sales tax issues to see if they apply. Could cost or save you a ton of grief and/or money.

 

[rockridgecattle]

we do the ledger bookwork on computer and the taxes are done by our accountant.

 

[I luv herfrds]

We keep a ledger in which we enter the expenses on one page and income on another. We use a paper clip to mark them.
We have a file cabinet with folders and we put the receipts in marked folders. Such as "Income" or "Expenses".
Since we would be lost trying to do our taxes we take them to a CPA.

 

[TexasBred]

I wasn't sure which forum to ask this question. Hope this one is ok.

I am just starting out and need a little business advice. I made my first sale today from some tomato plants that I grew out from seeds. How do you guys keep track of your income and expenses? I was figuring on keeping 2 cigar/shoe boxes. One for income and one for expenses and using a computer program to keep track of it all. Do any of you do your own taxes or take it to someone?What about equipment? How is that depreciated? As you can tell, I am not big time. Just trying to get a start.

A cigar box will work for the income. Get a big boot box for the expenses. :cry2:

 

[bandit80]

Ledger books, shoe boxes they all work.

You can also utilize spreadsheets or certain computer programs. I use Quicken for my farm and lawn mowing income/expenses. It is very user friendly, and it will generate reports needed for taxes, and I give the reports to the accountant. Simple as that. Some of these programs can be expensive, however. I believe Quicken for small businesses was about $170. There is also Quick books, but I think it is higher yet.

 

[dyates]

Use an accountant. Make an introductory appointment early so you don't have any last minute surprises. You'll have to decide accrual vs. cash method for accounting. You'll also have to set up a cost basis for assets (real estate, etc.). I would have saved myself several hours if I had paid the accountant one visit in the beginning rather than waiting until the end of the first year.

 

[backhoeboogie]

Don't forget the mileage. I forgot to mention it. My truck is not dedicated solely to farm use so I have to log miles. Those miles add up and it is a pain in the rear to keep them logged.

 

[Susie David]

Go to the IRS web site and down load a Schedule F and istructions look it over well, it will give you a quick idea of what you are in for.
Basically you can deduct and depreciate anything that you use in the business, cows, chickens, trucks, equipment, facilities and a portion of the mortgage, postage stamps, phone bill, dog food etc. I you are serious....of course the business is supposed to make money, but that usually comes a few years later.
Most folks that only sell a few carrots and a cow here and there keep it to thenselves...unless you are looking for the deductions.....30K worth of write off and 2K worth of sales will send up a red flag to the non english speakers at the IRS.
DMc

 

[HMK]

Thank you for all the great replies. I have done some of the things you suggested.