Expenses must be ordinary and necessary for the type of work completed to be deductible. Types of expenses that can be deducted are any 'ordinary and necessary costs' incurred in operating a farm: (this is not a complete list)
Examples of farming expenses that can be deducted:
- Business Use of Your Home (must use exclusively and regularly)
- Car and Truck expenses
- Chemicals
- Depreciation
- Feed
- Fertilizer
- Gasoline, fuel and oil
- Rent or lease of property or equipment
- Repairs and maintenance
- Supplies purchased
What farming expenses cannot be deducted?
- Capital expenses
- Expenses that are incurred for start-up costs, purchase of equipment, etc. they are generally recovered through depreciation.
- Nondeductible expenses
- Personal, living and family expenses (may be split between personal and operating expenses).
- Capital expenses
- Repayment of loans
- Loss of livestock
How do I report my Schedule F expenses?
To enter your expenses go to:
- Federal Section
- Income
- Profit or Loss from Farming
- General Expenses
You can read more information on farm expenses here.