Forms You May Need To File

When filing your income tax return, arrange your forms and schedules in the correct order using the sequence number located in the upper right corner of each form. Attach all other statements or attachments last, arranged in the same order as the forms or schedules they support.

Farmers can use the following forms and schedules. Some of them are illustrated in chapter 20.

Form 1040.   This form is the income tax return. List taxable income from all sources on Form 1040, including profit or loss from farming operations as figured on Schedule F (Form 1040). Figure the tax on this form, also.

Schedule A, Itemized Deductions.   List nonbusiness itemized deductions on this schedule.

Schedule B, Interest and Ordinary Dividends.   Report interest or dividend income of more than $1500 on this schedule.

Schedule C, Profit or Loss From Business.   List income and deductions and determine the net profit or loss from a nonfarm business on this schedule.

Schedule C-EZ, Net Profit From Business.   You can use this schedule in place of Schedule C if nonfarm business expenses are $2,500 or less and other requirements are met.

Schedule D, Capital Gains and Losses.   Report gains and losses from the sale of capital assets on this schedule.

Schedule E, Supplemental Income and Loss.   Report income or losses from rents, royalties, partnerships, estates, trusts, and S corporations on this schedule.

Schedule F, Profit or Loss From Farming.   Use this schedule to list all farm income and deductions and to determine your net farm profit or loss.

Schedule J, Farm Income Averaging.   Use this form to average farm income.

Schedule SE, Self-Employment Tax.   Figure self-employment tax on this schedule. See chapter 15.

Form 2210.   Figure any underpayment of estimated tax and any penalty on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.

Form 2210-F.   Figure any underpayment of estimated tax and the penalty on Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, if you are a qualified farmer.

Form 3468.   Figure the investment credit on Form 3468, Investment Credit. See chapter 9.

Form 3800.   Figure the general business credit on Form 3800, General Business Credit. See chapter 9.

Form 4136.   Figure the credit for federal excise tax on gasoline and special fuels on Form 4136, Credit for Federal Tax Paid on Fuels. See chapter 18.

Form 4255.   Figure the increase in tax from the recapture of investment credit on Form 4255, Recapture of Investment Credit. See chapter 9.

Form 4562.   Claim deductions for depreciation and amortization and elect the section 179 deduction on Form 4562, Depreciation and Amortization. See chapter 8.

Form 4684.   Report gains and losses from business and nonbusiness casualties and thefts on Form 4684, Casualties and Thefts. See chapter 13.

Form 4797.   Report gains and losses from the sale or exchange of business property and from certain involuntary conversions on Form 4797, Sales of Business Property.

Form 4835.   Report farm rental income on Form 4835, Farm Rental Income and Expenses, if you received it as a share of crops or livestock produced by a tenant and you, the landlord, did not have an arrangement that required you to materially participate or you did not materially participate in the operation or management of the farm. See chapter 4.

Form 6251.   Figure the alternative minimum tax on Form 6251, Alternative Minimum Tax - Individuals. See chapter 14.

Form 8594.   Report the purchase and sale of assets under certain circumstances on Form 8594, Asset Allocation Statement under Section 1060.

Form 8824.   Report the exchange of business or investment property for like-kind property on Form 8824, Like-Kind Exchanges. If you have any taxable gain, you must also file Schedule D (Form 1040) or Form 4797. See chapter 10.

Other Forms

You may have to file the forms below in certain situations.

If the last day for filing your form falls on a Saturday, Sunday, or legal holiday, your form will be on time if it is filed on the next day that is not a Saturday, Sunday, or legal holiday.

Form 940.   If you paid wages subject to FUTA tax during a calendar year, file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, by January 31 of the following year. If all the tax due was deposited by January 31, you have 10 additional days to file. See chapter 16.

Form 940-EZ.   Form 940-EZ is a simplified version of Form 940. See chapter 16.

Form 943.   If you paid wages for farm labor that were subject to social security and Medicare taxes or income tax withholding, file Form 943, Employer's Annual Tax Return for Agricultural Employees, by January 31 of the following year. If you deposited all the tax due by January 31, you have 10 additional days to file.

Form 1040-ES.   Figure and pay estimated tax on Form 1040-ES, Estimated Tax for Individuals. See Estimated Tax Payment and Return Due Dates, earlier.

Form 1065.   A farm partnership files Form 1065, U.S. Return of Partnership Income, by the 15th day of the 4th month following the end of the partnership tax year. For a calendar year partnership, the due date is April 15. See Partnership, later.

Form 1120.   A corporation files Form 1120, U.S. Corporation Income Tax Return, by the 15th day of the 3rd month following the end of the corporation's tax year. For a calendar year corporation, the due date is March 15. See Corporation, later.

Form 1120-A.   Many small corporations can use Form 1120-A, U.S. Corporation Short-Form Income Tax Return, instead of Form 1120.

Form 1120S.   An S corporation files Form 1120S, U.S. Income Tax Return for an S Corporation, by the 15th day of the 3rd month following the end of the S corporation tax year. For a calendar year S corporation, the due date is March 15. See S Corporation, later.

Form 2290.   If you use certain vehicles registered or required to be registered in your name on public highways, such as a truck or truck tractor, file Form 2290, Heavy Highway Vehicle Use Tax Return, for the following purposes.

• To figure and pay the tax due on heavy highway vehicles (taxable gross weight 55,000 pounds or more) used during the period from July 1 to June 30.
• To claim suspension from the tax when the vehicle is expected to be used 5,000 miles or less (7,500 for agricultural vehicles) during the period.

See the instructions for Form 2290.

Form 4868.   Apply for an extension of time to file your tax return on Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Filing this form does not, however, extend the time to pay any tax due.

Form 8109.   Employment taxes are deposited manually with Form 8109, Federal Tax Deposit Coupon. In general, income tax withheld plus the employer and employee's share of social security and Medicare taxes that total $2,500 or more for the year must be deposited. The IRS will send you a coupon book for making deposits 5 to 6 weeks after you receive an employer identification number (EIN) if you indicate you will pay wages.

Under certain circumstances you must deposit taxes electronically. See chapter 16.
 

Form 8822.   If you move, notify the IRS of a change in your home or business address with Form 8822, Change of Address. Be sure to include your suite, room, or other unit number.

Ordering forms.   See chapter 21 for information about getting any of the forms listed in this section.

Information Returns

These returns provide information the IRS requires for effective tax compliance. There are many different information returns. This discussion, however, is limited to Form W-2, Form 1099-INT, Form 1099-MISC, and Form 1096.

Form W-2.   If you are in a trade or business such as farming and you employ paid workers, prepare Form W-2, Wage and Tax Statement, for each employee, including any payment that was not in cash. Show, in the space marked Wages, tips, other compensation, the total paid to the employee. Send Copy A of each Form W-2 to the Social Security Administration with a completed Form W-3, Transmittal of Wage and Tax Statements, by the last day of February. See chapter 16.

Form 1099-INT.   Report interest of $600 or more paid during the calendar year in the course of your farm business, including interest on installment sale contracts, on Form 1099-INT, Interest Income.

Form 1099-MISC.   If you make total payments of $600 or more during the calendar year to another person, other than a corporation or an LLC that is taxed as a corporation, in the course of your farm business, you must file information returns to report these payments. Report on Form 1099-MISC, Miscellaneous Income, payments of $600 or more made for custom harvesting, crop spraying, services of a veterinarian, rents, commissions, fees, prizes, awards, and services provided by nonemployees. Payments of $10 or more for royalties are also reported on Form 1099-MISC.

Form 1099-MISC is used to report to the payee, and to the IRS, payments you made that were subject to backup withholding and the amounts you withheld, regardless of the amount of the payment.

Report payments for compensation to employees on Form W-2, not on Form 1099-MISC. See chapter 16.

Preparation of returns.   If you are required to file Forms 1099-INT or Forms 1099-MISC, prepare a separate form for each payee. File one copy of each form with the IRS by February 28 (March 31 if filing electronically) of the year following the calendar year the payments were made. Give the payee a statement (or copy of the form) by January 31 of the year following the calendar year the payments were made. These forms are read by machine and there are very specific instructions for their preparation and submission. Form 1099 can be issued electronically if the recipient consents to receive it that way. See the Instructions for Forms 1099, 1098, 5498, and W-2G.

Form 1096.   When sending copies to the IRS, use a separate transmittal, Form 1096, Annual Summary and Transmittal of U.S. Information Returns, for each different type of 1099 form.

Penalties.   If you file information returns late, without all the information required to be on the return, or with incorrect information, you may be subject to a penalty. See the Instructions for Forms 1099, 1098, 5498, and W-2G for information on Form 1099 penalties.

Backup withholding.   In certain cases, the law requires you to withhold income tax at a rate of 30% (backup withholding) on payments reportable on information returns, including commissions, nonemployee compensation, and other payments you make for services in your farm business or other business activities. The backup withholding rules do not apply to wages, pensions, or annuities.

See the Instructions for Forms 1099, 1098, 5498, and W-2G for more information.

IRS e-file (Electronic Filing)

E-file logo

You can file your tax returns electronically using an IRS e-file option. The benefits of IRS e-file include faster refunds, increased accuracy, and acknowledgment of IRS receipt of your return. You can use one of the following IRS e-file options.

• Use an authorized IRS e-file provider.
• Use a personal computer.
• Use a telephone if you receive a Telefile Tax Package.
• Visit a VITA or TCE site.
• Use an employer or financial institution.

For details on these fast filing methods, see your income tax package.

Partnership

A partnership is the relationship between two or more persons who join to carry on a trade or business, including farming. Each person contributes money, property, labor, or skill, and expects to share in the profits and losses.

For federal income tax purposes, the term partnership includes a syndicate, group, pool, joint venture, or similar organization carrying on a trade or business and not classified as a trust, estate, or corporation.

Family partnership.   Members of a family can be partners. To be recognized as a partnership for federal tax purposes, a partner relationship must be established and certain requirements must be met. For information on these requirements, see Family Partnership in Publication 541. Merely doing chores, helping with the harvest, or keeping house and cooking for the family and hired help does not establish a partnership.

If a husband and wife are partners in a farm operation or other business, they should report their partnership income or loss on Form 1065. See Form 1065, later.

Co-ownership and sharing expenses.   Mere co-ownership of property that is maintained and leased does not constitute a partnership. For example, if an individual or tenants-in-common of farm property lease that property for a cash rental or a share of the crops, a partnership is not necessarily created. However, tenants-in-common may be partners if they actively carry on a farm or other business operation and share in its profits and losses. A joint undertaking merely to share expenses is not a partnership.

Example.   Barbara Lee Brown and Judith Green are neighboring farmers. Each agrees to pay half the cost of buying and maintaining a combine to harvest their crops. They do not have a partnership.

Partner's distributive share.   Each partner's distributive share of partnership income, gain, loss, etc., must be included on that partner's tax return, even if the items were not distributed.

A limited partner generally does not include his or her distributive share of income or loss in computing net earnings from self-employment.

Self-employment tax.   Unless you are a limited partner, your distributive share of income from a partnership is self-employment income. If you and your spouse are partners, each should report his or her share of partnership income or loss on a separate Schedule SE (Form 1040), Self-Employment Tax. The self-employment tax of a member of a partnership engaged in farming is discussed in chapter 15.

Reporting the partnership income on separate Schedules SE will give each of you credit for social security earnings on which retirement benefits are based.

Selling or exchanging a partnership.   When you create a partnership, you generally do not recognize gain or loss on contributions of money or property you make to the partnership. However, you generally recognize gain or loss when you sell or exchange your interest in the partnership.

Form 1065.   Partnerships file a return on Form 1065, U.S. Return of Partnership Income. This is an information return showing the income and deductions of the partnership, the name and address of each partner, and each partner's distributive share of income, gain, loss, deductions, credits, etc.

Form 1065 is not required until the first tax year the partnership has income or deductions. In addition, it is not required for any tax year a partnership has no income and expenses.

Schedule F (Form 1040).   Use Schedule F (Form 1040) to report a farm partnership profit or loss. This schedule should be filed with Form 1065. The profit or loss shown on Schedule F, adjusted for separately stated items to be reported on Schedule K-1 and Schedule K of Form 1065, is entered on line 5 of Form 1065. See Form 1065 instructions for more information.

Other schedules.   Each partner's distributive share of partnership items, such as ordinary income or loss, capital gain or loss, net earnings from self-employment, etc., is entered on Schedule K-1 of Form 1065. Fill in all schedules that apply to the partnership.

Filing penalty.   In the following situations, a penalty is assessed against a partnership that is required to file a partnership return.

• The return is not filed on time, including extensions.
• The return does not show all the information required.

The penalty is $50 times the total number of partners in the partnership during any part of the tax year for each month (or part of a month), up to 5 months, the return is late or incomplete.

Exception to filing penalty.   A partnership does not have to pay the penalty if it can show reasonable cause for failure to file a complete or timely return. A small farm partnership with 10 or fewer partners is generally considered to meet this requirement if the following information can be shown.

• All partners have reported their share of all partnership items on timely filed income tax returns.
• All partners are individuals (other than nonresident aliens), estates, or C corporations.
• The partnership has not elected to be subject to the rules for consolidated audit procedures.

Consolidated audit procedures. In a consolidated audit proceeding, the tax treatment of any partnership item is generally determined at the partnership level rather than at the individual partner's level. After the proper tax treatment is determined at the partnership level, the IRS can automatically make related adjustments to the tax returns of the partners, based on their share of the adjusted items.

More information.   For more information on partnerships, see Publication 541.

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