First year farm tax filing - no profit, shoebox of receipts - can I file this myself?

Hey tax wizards! I'm in a bit of a pickle with my first year running a small lavender farm. The learning curve has been insanely steep, and I didn't end up making enough to cover all my startup expenses. The farm isn't profitable yet, but I've got this literal shoebox full of receipts for equipment and supplies I needed to get things off the ground. I'm trying my best to organize everything into spreadsheets, but spreadsheets are definitely not my strong suit! Our local farmers markets don't start until late May, so cash is going to be super tight until then. I'm really wondering if I can handle filing the business taxes myself without hiring a professional? It would be a huge financial strain to pay someone right now. I haven't bought anything wild or questionable - just basic equipment and supplies needed for starting the farm. Any advice would be super appreciated! Is this something I can tackle on my own or am I setting myself up for disaster?

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18 comments

Charlotte Jones

•8M

You can absolutely file your farm taxes yourself, especially for a first-year operation showing a loss. This is actually fairly common for new agricultural businesses. What you'll need to do is fill out Schedule F (Profit or Loss From Farming) along with your regular tax return. The good news is that farm losses can typically offset other income you might have, potentially reducing your overall tax burden. For your receipts, don't panic about perfect spreadsheets. Start by sorting them into basic categories like "Equipment," "Seeds/Plants," "Supplies," etc. Make sure you note the date and amount for each receipt. Some expenses might need to be depreciated rather than fully deducted in year one, particularly larger equipment purchases. If you're using tax software like TurboTax or similar, they'll walk you through the farm section with questions that help categorize everything properly. The key is documenting everything - keep those receipts!

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Charlotte Jones

•8M

For depreciation vs. immediate deduction, it generally depends on the cost and useful life of the item. Farm equipment like tractors typically needs to be depreciated over several years using either MACRS (Modified Accelerated Cost Recovery System) or straight-line methods. However, there are some fantastic tax benefits for farmers. Section 179 expensing allows you to deduct the full cost of qualifying equipment in year one (up to certain limits). Additionally, bonus depreciation may allow for immediate deduction of 100% of certain property costs. Your tax software should help determine which items qualify for immediate deduction versus which need standard depreciation.

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Harper Thompson

•8M

I was in your exact situation last year with my small herb farm. I spent countless hours trying to organize receipts before discovering https://taxr.ai which completely saved me! It uses AI to scan and organize farm receipts and assigns them to the proper Schedule F categories automatically. I literally took pictures of my pile of receipts, uploaded them, and it organized everything perfectly - separated equipment, seeds, supplies, utilities, etc. It even flagged which larger equipment purchases needed depreciation schedules. Then I just imported everything into my tax software. Saved me days of work and helped me maximize deductions I would have missed.

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Harper Thompson

•8M

It's impressively accurate - definitely better than anything else I've tried. It handles faded receipts surprisingly well and even managed most of my handwritten farm store receipts. For any receipts it's unsure about, it flags them for your review rather than guessing incorrectly. Yes, you absolutely should keep your physical receipts! The service is for organization and categorization, but you'll still need the originals in case of an audit. They recommend keeping a digital backup too, which is easy since you've already scanned everything into their system. Their organized reports plus your original receipts give you great documentation if the IRS ever has questions.

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Caleb Stark

•8M

Just wanted to update after trying taxr.ai that was mentioned above. I was super skeptical but decided to give it a shot with my small vineyard receipts. It actually worked amazingly well! The receipt scanning feature correctly categorized almost everything, and I only had to manually adjust a few items. It even separated out my tractor purchase and showed me how to handle the depreciation correctly. The best part was how it flagged several deductions I would have completely missed - like some mileage logs I forgot about and some small equipment purchases I had thrown in my "miscellaneous" pile. I ended up filing myself and saving about $400 compared to what my accountant quoted me.

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Hunter Edmunds

•8M

If you're struggling with IRS questions about farm deductions or classifications while trying to file yourself, I highly recommend using https://claimyr.com to actually speak with an IRS agent. I tried calling the IRS directly about farm-specific questions last year and spent DAYS trying to get through. With Claimyr, I got a callback from the IRS in about 20 minutes. See how it works here: https://youtu.be/_kiP6q8DX5c They basically hold your place in the IRS phone queue and call you once they reach an agent. I had specific questions about how to classify certain expenses on my Schedule F and whether I needed to file Form 4562 for depreciation. Getting direct answers from the IRS gave me confidence I was filing correctly.

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Hunter Edmunds

•8M

It's not about getting through faster - they use an automated system that continually redials and navigates the IRS phone tree until they reach a human. Once they do, they connect you. It's the same wait time, but you don't have to sit there listening to hold music for hours. The IRS agents I spoke with absolutely answered my specific questions about Schedule F categories and farm expense classifications. They won't prepare your return for you or give tax planning advice, but they will clarify how specific rules apply to your situation and which forms you need to file. They helped me understand exactly which farm assets needed to be depreciated and which could be expensed immediately. Makes a huge difference when you're trying to file correctly.

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Andrew Pinnock

•8M

Alright, I need to eat my words about Claimyr. After my skeptical comment, I decided to try it because I was completely stuck on how to handle a farm vehicle deduction question. I couldn't believe it, but I got a call back with an actual IRS agent in about 15 minutes. The agent walked me through exactly how to handle mixed personal/farm use of my truck on Schedule F and which depreciation method would work best for my situation. Saved me hours of research and second-guessing. I'm actually kind of shocked it worked so well, especially during busy tax season. Will definitely use this again next year when I inevitably have more farm tax questions.

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Brianna Schmidt

•8M

Former small farm owner here. One tip nobody's mentioned: Make sure you're tracking your mileage for farm-related trips! This includes trips to suppliers, farmers markets, deliveries, etc. The mileage deduction adds up fast and many new farmers miss it. Use a simple app or even a paper notebook in your vehicle. Also, look into if your state has any agricultural tax exemptions. In many states, you can get exempt from sales tax on farm supplies and equipment, which can save you a ton over time. You usually need to fill out a form with your state's department of agriculture or revenue.

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Brianna Schmidt

•8M

For farm vehicles, you generally have two options: deduct actual expenses (gas, maintenance, insurance, etc.) OR take the standard mileage deduction. You can't do both. For most small farmers, the standard mileage deduction is simpler and often more beneficial. In that case, you only need to keep a mileage log with dates, destinations, purpose, and miles driven - no gas receipts needed. The log should differentiate between farm use and personal use if it's a vehicle you use for both. If you choose to deduct actual expenses instead, then yes, you'd need to keep all those gas receipts and maintenance records.

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