Site offers facts sheets, form samples, rural tax guide, more


Capital Press

USDA's Risk Management Agency has funded a project to provide farmers and ranchers a resource for ag-related income and self-employment tax information.

A newly created website, Rural Tax Education -- www. -- is up-to-date and easy to understand, said Dave Paul, director of RMA's Spokane Regional Office.

The project was a collaborative effort of 15 land grant universities across the nation and hosted by Utah State University through a $50,000 grant in 2009.

The website contains the "Tax Guide for Owners and Operators of Small and Medium Size Farms" and offers several fact sheets and samples on tax topics including depreciation and expensing, who's considered a farmer for tax purposes, a sample tax return and a small farm tax guide.

"I think it's extremely helpful. It's a very simple website, very clear," Paul said.

Taxes are incredibly important to farmers, he said. They are a major cost and can make or break an operation.

His office often gets questions from producers about filing taxes, listing proceeds from crop insurance and what they can defer, and he thinks the website will become a favorite among producers, he said.

"It is designed to maximize producers' understanding of tax requirements. It gives farmers something very specific to help guide them through that process," he said.

Most of the university people working on the project are on-the-ground extension personnel, and obviously they thought there was a need for a one-stop shopping place for this information, he said.

Project leader Ruby Ward, associate professor with University of Utah Department of Applied Economics and an extension specialist, said the website came about due to a need by extension and other agencies, such as RMA, to assist producers.

More and more, USDA programs are being linked to a producer's federal income tax return, and any producer who receives a program payment must fill out a 1099 form.

Farmers are not sure what they're supposed to be doing, don't want to trigger a tax consequence and are going to producer-education sources for answers, she said.

Due to budget cuts at the Internal Revenue Service, the agency had eliminated several chapters and tax return samples in its farmers' tax guide publication, and there were few answers to be had, she said.

"We were seeing less material for producers, and tax issues were changing rapidly and more questions were coming up," she said.

Tax considerations can have an effect on the timing of income and deductions and determining how farm transactions, such as new equipment purchases, are structured

The website offers help on those tax-related topics and lists upcoming informational webinars.

Several universities contributed to the project, and the guide was produced by the Land Grant University Tax Education Foundation. The website will be revised as needed.

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