Like all business owners, farmers can benefit from getting as many tax breaks as possible. With the end of the year fast approaching, this is the last opportunity to make sure to maximize deductions for the upcoming tax season. Thus, now is the time to take inventory of farm supplies and equipment. There is often a drive to buy these resources before the first day of the new year to help limit how much income a farmer has to report on their tax return.

How Year-End Spending on Farm Supplies Can Reduce Tax Liabilities

Farm Supply Purchases 

Consider using any money you have left over in this year’s budget to stock up on farm supplies or upgrade your machinery. This is a strategic way to invest in your business while reducing your tax obligations. Farmers are allowed a long list of business expenses they can deduct, including feed, fertilizer, seeds and plants, cattle guards, water tanks, feed bunks, and the depreciation of new equipment. While keeping your budget in mind, this is the best time of year to get the things you need to operate your farm at peak efficiency.

Proper Deduction of Farm Supplies 

To deduct any purchases you make, you must show intent to make a profit from your farm. This means you have to prove you are actively trying to generate income by conducting your farm in a businesslike manner. If the IRS finds a reason to classify your farm as a hobby rather than a business, you won’t be able to deduct the cost of your farm supplies.

Good tax planning and quality farm supplies are key to any farmer’s success. If you are looking to boost your farm’s functionality and take advantage of year-end spending deductions, contact Olson Precast Concrete. They have provided the residents of West Plains, MO, with top-of-the-line concrete products and services for more than 25 years. They’re the area’s number one source for a variety of supplies and equipment used in the agricultural industry. Call (417) 256-1500 to inquire about inventory or visit their website for more information on the products they have available.