Farming & Fishing Income

Farming and Fishing professions are well known professions across the world. Business owners that provide these two services may have the opportunity to avoid making quarterly estimated tax payments on their returns. If two-thirds of the business owner’s annual gross income is in one of the two areas, there is a way to only pay a single estimated tax payment rather than all four. By filing the individual return and paying the estimated tax amount due on or before March 1, the other three payment periods will not apply to you. If you choose not to file by March 1, you would be able to make the single payment by January 15, or by the next business day (if the 15th was to fall on a weekend or legal holiday).

The way to report the two are listed below, as stated in “Topic No. 416 Farming and Fishing Income” on the IRS official website:

Farming: Report income and expenses from farming on Schedule F (Form 1040), Profit or Loss from Farming. Additionally, use Schedule SE (Form 1040), Self-Employment Tax to figure self-employment tax if your net earnings from farming are $400 or more.

Fishing: Report income and expenses from fishing on Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship). Use Schedule SE (Form 1040) to figure self-employment tax if your net earnings from fishing are $400 or more.

By: Chandler Hobbs, Tax Staff at CROFT & FROST

Source: https://www.irs.gov/taxtopics/tc416