Schedule F Tax Filing for Farmers

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What is Schedule F?

Schedule F, titled Profit or Loss From Farming, is attached to the individual income tax return. It reports farm income, subtracts farm expenses, and arrives at a net profit or loss, which then flows to the rest of the return.

The IRS publishes instructions for the schedule each year. They explain each line and are worth reading before you or your preparer begin.

Many farmers file late in the winter or early spring because of when forms and settlement sheets arrive. Check the IRS site for current filing and payment rules for farmers, since special options exist for some, and ask your CPA which ones fit.

Who files it?

Generally, sole proprietors and some single-member LLCs that farm for profit use it. Partnerships and corporations report farm income on their own returns instead. Whether an activity counts as farming for profit, as opposed to a hobby, has its own rules that you should review with a CPA.

If you rent land to someone else under certain arrangements, the income may be reported elsewhere, so ask a tax professional.

If you use a software package, make sure its categories match Schedule F lines. Some packages were built for general small business and need setup for farm items such as livestock sales or patronage dividends.

How is the form organized?

The form is divided into parts. One part covers income, with separate areas for sales of products you raised, sales of items you bought for resale, cooperative distributions, government payments, crop insurance proceeds and other items. Another lists expenses by category, from feed and seed to repairs and utilities.

Other sections cover accrual method farmers, depreciation, and reporting details. Check the current IRS instructions for exact line numbers and categories, since forms change.

Extension tax programs, such as Utah State University's rural tax education pages, offer plain-language fact sheets on farm tax topics that can help you prepare good questions.

• Income from products raised and from items resold
• Government payments and insurance proceeds
• Expenses by category
• Depreciation and asset information
• Net farm profit or loss

What records help you complete it?

Organize income by source and expenses by category all year. Many farmers use accounting software with a chart of accounts matched to Schedule F lines. That saves hours at tax time.

Keep a separate bank account for the farm, and save receipts for every deduction. Keep inventory and asset records, and note which items were used both for farm and personal purposes.

How does Schedule F connect to other taxes?

Net farm profit can be subject to self-employment tax in addition to income tax, and it may affect estimated tax payments for the next year. Losses may be limited by various rules, which a CPA can explain.

Farm income can be unpredictable, and special rules may apply to averaging, deferral or other options. Ask about these rather than assuming; Publication 225 describes them in general terms.

What mistakes show up on farm returns?

Mixing personal and business expenses, missing government payments or insurance proceeds, forgetting to report sales, misclassifying expenses, and not keeping depreciation schedules current are common. Incomplete records can lead to missed deductions and potential issues if audited.

Use a preparer who knows farms, and review the finished return before it is filed. Keep a copy and supporting records for the period your CPA recommends.

What should you do after filing?

Keep a complete copy of the return and the records behind it. Ask your CPA how long to keep them, since some items, such as asset purchase records, matter for many years after the purchase.

Review the finished return with your preparer before next year starts. Ask what you could have done better with records, what a typical audit trigger looks like and what to change in the months ahead. Use the net profit figure to update your budget and your estimated tax plan.

If you receive an IRS notice, read it carefully and respond by the stated date. Do not ignore it. Call your preparer promptly.

• Save the return and supporting records
• Review with your preparer
• Update next year's budget and estimates
• Respond to any IRS notice on time

Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.