Being that many of my clients are from Austin, Texas, I thought I would share this publication released by the IRS yesterday.
Here is a brief overview of some of the more important tips:
Net income losses: If your farm generates a negative profit (expenses greater than income), you may be able to carry this loss back to offset taxes paid in a prior period, thus generating a refund. You also have the option to carry it forward and offset future year income and taxes.
Weather related sales: This one is important as we’ve seen some dry periods in Texas, especially during 2011 when we had the Bastrop fires. If you are forced to sell more of your livestock because of drought or flooding, then you may be entitled to delaying the gain from these sales.
Loan Repayment: While you’re entitled to a tax deduction for all ordinary and necessary business expenses, only interest paid on a loan nets you a deduction. It is important to note, that the loan must have been used for business, and not personal purposes.
Fuel Credits/Refunds: Use an ample amount of fuel on the farm last year? This provision written in the code allows for a credit or refund of excise taxes paid on fuel for farming purposes.
For more information, please contact Paul at email@example.com or visit the IRS website for more details.