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Making money / Business plan?
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<blockquote data-quote="Ruark" data-source="post: 837149" data-attributes="member: 16279"><p>One thing you REALLY need to do is get together with a good CPA with farm and ranch experience. He will be your best friend. If you are operating your farm for profit (even if you just have 3 or 4 head, or if you're leasing it out for $100 a year), you can claim all kinds of tax deductions. Also, the IRS doesn't require you to make a profit for the first few years; they realize it takes time to get a farm or ranch operation started up. It may be several years before you can even bring in any livestock, and some operations go for decades without showing a profit. </p><p></p><p>You'll need to establish it as a bona fide farm operation. Open a business checking account with a DBA name (e.g. "Oakwood Farms," "Big River Ranch," whatever). Install ranch software on your computer to track your livestock and expenses. Keep ALL receipts and match them to the record in the software. I jot down a number on the corner of the receipt that matches the item number in the record. Make some business cards. Put up a small website for your ranch. Join a cattle raiser's association and put the sign up on your front fence or gate. You get the picture.</p><p></p><p>I started out pretty naive, thinking we would owe about $16,000 in taxes. My CPA got that down to a $478 refund. A LOT of my capital assets turned out to have depreciation expenses, e.g. a metal building, the farm truck, the fence around the property. ANY expense you have related to the operation of the ranch is deductible. </p><p></p><p>Just be able to show that it's related to the operation, and have receipts in case of an audit. For example, spraying equipment and chemicals, hand tools, welders, road work, chainsaws, digging out ponds, tractors, diesel fuel and oil, gas/tires/repairs for the farm truck, feed, buildings, wire, etc. Also any costs for maintenance and repair on any of this equipment. </p><p></p><p>I even deducted some ammunition and calls for hunting coyotes - that's "predator control." Also feed and vet bills for 6 feral cats that live on our property - they control snakes and rodents. If you do any travel related to the ranch operation, e.g. going to a livestock show or seminar, or going out of town to look at some livestock or to buy some equipment, you can count the mileage as a deduction, as well as up to a certain amount on food and lodging expense. Again, the key is keeping good records and a neat, organized receipt file. I tape my receipts into a spiral notebook, one on each page.</p><p></p><p>Well, you get the picture.</p></blockquote><p></p>
[QUOTE="Ruark, post: 837149, member: 16279"] One thing you REALLY need to do is get together with a good CPA with farm and ranch experience. He will be your best friend. If you are operating your farm for profit (even if you just have 3 or 4 head, or if you're leasing it out for $100 a year), you can claim all kinds of tax deductions. Also, the IRS doesn't require you to make a profit for the first few years; they realize it takes time to get a farm or ranch operation started up. It may be several years before you can even bring in any livestock, and some operations go for decades without showing a profit. You'll need to establish it as a bona fide farm operation. Open a business checking account with a DBA name (e.g. "Oakwood Farms," "Big River Ranch," whatever). Install ranch software on your computer to track your livestock and expenses. Keep ALL receipts and match them to the record in the software. I jot down a number on the corner of the receipt that matches the item number in the record. Make some business cards. Put up a small website for your ranch. Join a cattle raiser's association and put the sign up on your front fence or gate. You get the picture. I started out pretty naive, thinking we would owe about $16,000 in taxes. My CPA got that down to a $478 refund. A LOT of my capital assets turned out to have depreciation expenses, e.g. a metal building, the farm truck, the fence around the property. ANY expense you have related to the operation of the ranch is deductible. Just be able to show that it's related to the operation, and have receipts in case of an audit. For example, spraying equipment and chemicals, hand tools, welders, road work, chainsaws, digging out ponds, tractors, diesel fuel and oil, gas/tires/repairs for the farm truck, feed, buildings, wire, etc. Also any costs for maintenance and repair on any of this equipment. I even deducted some ammunition and calls for hunting coyotes - that's "predator control." Also feed and vet bills for 6 feral cats that live on our property - they control snakes and rodents. If you do any travel related to the ranch operation, e.g. going to a livestock show or seminar, or going out of town to look at some livestock or to buy some equipment, you can count the mileage as a deduction, as well as up to a certain amount on food and lodging expense. Again, the key is keeping good records and a neat, organized receipt file. I tape my receipts into a spiral notebook, one on each page. Well, you get the picture. [/QUOTE]
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