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10 Tax Tips for Farmers

        Money | Taxes

4
Split the Bills
You can split your utilitiy bills to account for what goes to the house and what goes to the barn. Maksymowicz/iStockphoto/ThinkStock
You can split your utilitiy bills to account for what goes to the house and what goes to the barn. Maksymowicz/iStockphoto/ThinkStock

If you're using part of your home as an office space for the farm, you may be able to take the home office deduction. Keep in mind that the space has to be used exclusively for farm business – it can't be the corner of the playroom where you do the books after the kids are in bed. The easiest way to figure out this deduction is just to multiply the square footage of the space by $5, to a maximum of $1,500.

Additionally, if your home and your farm share the same physical property, you may be paying for both of them in the same utility bills. You can save yourself a lot of tax-time sorting by keeping track of how much of those payments are for the farm (and how much are for your home) throughout the year. You can deduct the farm-related utility expenses from the income the farm is generating. It may even be worth it for your farm to have its own meters for utilities like electricity and water to keep things separate.


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