Farmers get extension to file taxes

Farmers and fishermen can file by April 15 with waiver.

The Internal Revenue Service (IRS) announced an extension in the filing deadline for many people who qualify as farmers or fishermen. An individual is a qualified farmer for 2012 if at least two-thirds of his or her gross income from all sources for either 2011 or 2012 was from farming.

Gross income from farming is the total of the following amounts from your tax return:

  • Gross farm income from Schedule F (Form 1040).
  • Gross farm rental income from Form 4835.
  • Gross farm income from Schedule E (Form 1040), Parts II and III.
  • Gains from the sale of livestock used for draft, breeding, sport, or dairy purposes reported on Form 4797.

Farm income does not include any of the following:

  • Wages you receive as a farm employee.
  • Income you receive from contract grain harvesting and hauling with workers and machines you furnish.
  • Gains you receive from the sale of farm land and depreciable farm equipment.

For more information about tax rules for qualified farmers go to Chapter 15 of the IRS’s Farmers Tax Guide publication 225.

Most farmers typically file by March 1, under special rules that allow them to avoid making quarterly estimated tax payments during the year. The fiscal cliff deal was signed into law on Jan. 2, 2013 called the American Taxpayer Relief Act of 2012 (ATRA) by the federal government. This has caused the IRS a delay to process some of the forms farmers and fishermen must use, particularly Form 4562 which is used to report depreciation. The forms should be ready by late Feb. or early March.

The IRS will waive penalties for the 2012 tax year for these taxpayers who miss the March 1 deadline, as long as they file their returns and pay the tax due by April 15.

To be able to use the April 15 deadline instead of March 1 for a farm return, the taxpayer must complete Form 2210 F and check the waiver box A in Part I. The form must be attached to the return.

Michigan State University Extension TelFarm Center has additional tax information as well. Roll your cursor over the Resources tab and select Telfarm articles.

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