Has anyone done a business plan for their farm?

[FarmersDigest]

My wife is an Business Auditor for the IRS . This Jan. 2015 she will be intensive teaching the new IRS hires in Indianapolis. I can assure you that there are plenty of CPAs that do not fully understand the farm codes and others that get quite creative in your tax returns as most of them do the garbage in and garbage out thing depending on what receipts and other information that you provide them. Guess who gets to pay the $$$ penalties for incorrect returns? Then too, Congress enacted a law for the IRS to catch these creative CPA's by going to their offices and comb through their files. If found at fault, these CPAs receive quite hefty fines ( and penalties and in some cases jail time ) as well as the clients with creative tax returns. ( Just 3 months ago, one such tax payer was found to be less than honest in their tax returns for the last 3 years and was assessed over $80,000 in taxes due PLUS a fine of $ 100,000. This case is going to Tax Court. Their CPA of the last 6 years is now being audited in his office with all client files being examined. ). Getting caught up in this type of a scenario in not fun so do your due diligence and double check who you hire !

Oh my gosh! See this kind of stuff gets me so sick to my stomach. I feel like we are going to be way over ours heads! It makes me have second thoughts about what we are wanting to do. I just wish it could be simple as living off the land, but I know I am dreaming. Well again, thank you for info. as this is the stuff we need to know and watch out for!

 

[Bossroo]

Each of my parents owned a farm , also My father was a Vet. , my mom owned a general store in town too. I was born and raised on a farm and owned my own farm all of my life. If one watches their "P" s and "Q"s and keep good records and have a very knowledgable and reputable farm CPA ... life is GOOD on a farm ...

 

[Baymule]

I think what Bossroo is trying to tell you about the IRS, is if you get hold of one of those "creative" CPA's and it sounds fishy, then politely decline. Common sense, just common sense. Read the IRS links, then you know what you can and can't do. Educate yourself.

Basically, you write off farm expenses. That does not include that trip to Disney World where you stopped at a farmer's market on the way doing "research".

You add up farm income. Subtract expenses from income, the resulting number will either be a plus (pay taxes on it) or a minus.

No need for second thoughts. Don't let any of this scare you, just because it is new to you. You will learn the rules, you are not stupid, you can learn this and you are smart enough not to try to cheat or lie. This is a wonderful opportunity for you and your family. There will be ups and downs, but aren't there ups and downs in life anyway?

 

[FarmersDigest]

Each of my parents owned a farm , also My father was a Vet. , my mom owned a general store in town too. I was born and raised on a farm and owned my own farm all of my life. If one watches their "P" s and "Q"s and keep good records and have a very knowledgable and reputable farm CPA ... life is GOOD on a farm ...

That's great news! That's one thing that I was telling my DH, I want to keep everything separate. So all info for the cattle, in one specific place, and same thing for the processing plant, and alfalfa. We will have to more research on a farm CPA in the area of the farm. Thank you.

 

[FarmersDigest]

I think what Bossroo is trying to tell you about the IRS, is if you get hold of one of those "creative" CPA's and it sounds fishy, then politely decline. Common sense, just common sense. Read the IRS links, then you know what you can and can't do. Educate yourself.

Basically, you write off farm expenses. That does not include that trip to Disney World where you stopped at a farmer's market on the way doing "research".

You add up farm income. Subtract expenses from income, the resulting number will either be a plus (pay taxes on it) or a minus.

No need for second thoughts. Don't let any of this scare you, just because it is new to you. You will learn the rules, you are not stupid, you can learn this and you are smart enough not to try to cheat or lie. This is a wonderful opportunity for you and your family. There will be ups and downs, but aren't there ups and downs in life anyway?

Thank you! We will for sure read the IRS site. You are right, common sense is what we need to make sure to have when doing this all. Thanks to the comp, people like you, and books we are being able to educate ourselves.

Lol that would be insane to think would be something you can claim. My DH and I are honest people, we don't like doing thing's by lying or cheating. 1 because we take pride in being honest and being people that someone can trust and 2 because it's not worth all the stress and trouble that comes along with the lying!

Hey you made that sound real simple!

Thank you! I think that is my serious fear, all this being so new. I'm great with knowing how thing's are supposed to go or the routine, and when it's something I don't know, it really stresses me out! Thank you for saying I'm not stupid and that I can learn all this. It does really sound awesome for my family. That's the other reason why we want to do this. My DH and I have always felt we were born in the wrong era. We have always wanted to live off the land, provide great food for our family, and use our hands everyday! Not be stuck in an office. Again, you are so right! There are ups and downs in life anyway. So why not at least live the way we want, and have the same ups and downs. Again thank you, thank you!

 

[SheepGirl]

I have a business plan I wrote for my college business class that I am actually using fir my farm that I registered as a business with the state of MD. I then rewrote and edited it for a different business class to reflect the changes over 2 years including the additions of chickens and now my ability to sell livestock supplies and equip. I can pm it to you if you want.

 

[lcertuche]

I haven't but then again I only get 3 or 4 eggs a day but I think it behooves everyone to work out a budget. I figure my eggs are finally down to about $28 per egg, lol. I got this off the internet. Anyone seriously wanting to farm for a profit should consider the government and the future.

https://www.irs.gov/uac/newsroom/10-things-to-know-about-farm-income-and-deductions

 

[Sara Ranch]

Lol - I gotta laugh. $28 per egg - I am right there with you!! And people just don't get it.

This is an old thread, but the topics are still important. When I took classes, including one to write a Farm/Ranch business plan, nobody knew anything about food, where it comes from, what it should cost, how to get the product to market, or the laws/tax rules for the city, the county, or the state! So frustrating!