March 1 is file your taxes time
Farmers are unique. The IRS allows them to pay their income taxes later than almost anybody else.
Noramally all returns are due on April 15 of each year and taxpayers need to pay in their taxes by either having enough withholding taken out of their wages or paying 4 equal quarterly estimated tax payments in order to not have a penalty charged.
However, farmers can either make one quarterly payment on January 15 (for the previous year) equal to the lower of 90% of their current estimated tax for the year or 100% of the prior year’s tax. Or they can pay all of their tax by March 1 and not have to pay in any estimated taxes. These options can save the farmer up to 5-10% on their tax bill due to the time value of money in being able to delay their tax payments for almost a year.
Information on how to qualify for this favorable treatment is at the IRS web-site. Remember, in order to be called a farmer, at least two thirds of your gross income needs to be from farming
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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