Schedule F or C? How to Handle Farm Expenses with YouTube Income

So last summer my wife and I purchased a 72 acre farm that's mainly timber/wooded land. This is now my primary occupation after leaving my corporate job. The thing is, we haven't actually sold any timber or farm products yet since taking ownership. We're still in the early stages of getting everything set up properly. Here's where it gets complicated - I've been documenting the whole journey on YouTube and making decent money from Google Adsense on those videos (about $2,100 monthly). My question is about how to file taxes correctly. Should I be using Schedule F for farm expenses and Schedule C for the YouTube income? Or can I somehow combine them since the YouTube content is directly about the farm? I've already spent around $34,000 on farm equipment, fencing, and other startup costs that I want to deduct properly. I'm just really confused about which forms to use since the income isn't directly from farm operations yet, but from content I create about the farm. Any advice would be super appreciated!

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20 comments

Luca Romano

•8M

This is actually a common scenario with modern farming operations! The key question is whether your YouTube channel is an integral part of your farm business or a separate activity. If your YouTube content is specifically about your farming operation and you're presenting it as part of your overall farm business (like documenting your journey, sharing farming techniques, etc.), you could potentially treat it as farm income on Schedule F. The IRS looks at the "regularly carried on" nature of activities and whether they're part of a unified business operation. However, since your only actual income is from YouTube/Adsense and not from farm products themselves, you might be safer filing Schedule C for the YouTube income and Schedule F for the farm expenses. This approach clearly separates the two activities until your farm begins generating direct income. You'll still be able to deduct legitimate farm startup expenses on Schedule F even with no farm income yet, though it will create a farm loss. Also, be aware that the IRS has special rules for farms that consistently show losses, called the "hobby loss" rules. You'll need to demonstrate your intent to make a profit from the actual farming operation over time.

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Luca Romano

•8M

The IRS generally looks at a period of 5 years to determine if your activity is profit-motivated or a hobby. If you show a profit in 3 out of 5 consecutive years (2 out of 7 years for horse breeding/training), there's a presumption that you're running a business rather than a hobby. Even if you don't meet that test, you can still prove profit motive through other factors: operating in a businesslike manner, expertise in the field, time and effort invested, expectation that assets will appreciate, success in similar activities, history of income/losses, occasional profits, and your financial status. Keeping detailed records and a business plan showing how you intend to become profitable is extremely important.

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Mateo Hernandez

•8M

I was in exactly the same situation last year with my homestead YouTube channel making more than my actual farm! I spent weeks trying to figure out the right approach until I discovered https://taxr.ai which seriously saved me. I uploaded my farm receipts and Youtube earnings statements, and it automatically categorized everything correctly between Schedules C and F. The tool recommended I keep the operations separate for now - Schedule C for YouTube and Schedule F for the farm - since they suggested this would give me the cleanest documentation if I ever got audited. It even flagged some mixed-use equipment that I needed to partially allocate between business types. Definitely worth checking out if you're trying to navigate this unique situation!

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Mateo Hernandez

•8M

It actually helps analyze your specific situation and recommends the appropriate filing approach - it doesn't just tell you which form but explains why based on your circumstances. The tool examines your income sources and expense patterns to make recommendations, then provides guidance for each expense category. Keeping everything on Schedule F might seem simpler, but it can create issues if audited. The IRS often scrutinizes farm losses offset by non-farm income. By properly separating content creation (Schedule C) from actual farming (Schedule F), you create a cleaner audit trail that shows you understand the distinction between your different business activities.

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Aisha Khan

•8M

Just wanted to follow up about my experience using taxr.ai for my situation. I was initially skeptical as mentioned, but decided to try it anyway since I was confused about how to handle my woodworking business income vs my woodworking YouTube channel. The tool actually identified several deductions I was missing by incorrectly categorizing everything together. It showed me exactly which expenses belonged on which schedule, and even helped me understand how to properly allocate shared expenses like my workshop space and tools that I use both for creating products and filming content. Ended up saving me around $3,800 in taxes by properly structuring everything! Definitely changed my mind about separating the businesses on different schedules.

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Ethan Taylor

•8M

After spending 6 HOURS on hold with the IRS trying to get clarity on this exact Schedule F vs C question for my lavender farm/online content situation, I finally found https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. It literally got me connected to a real IRS agent in under 20 minutes! The agent confirmed that for my situation, I should keep the YouTube income on Schedule C and farm expenses on Schedule F, but that I needed to maintain clear documentation showing the relationship between the two businesses. He also mentioned that as long as I can show the farm is a legitimate business attempt (business plan, regular activity, proper accounting), having initial losses while establishing the operation is completely acceptable. Such a relief to get an official answer instead of just guessing!

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Ethan Taylor

•8M

The service basically holds your place in line with the IRS and calls you when they're about to connect you. It uses some kind of system that continuously redials and navigates the phone tree until it gets through to a representative. I had the exact same concern about whether it was connecting to the real IRS. I verified it was legitimate by having them transfer me to the specific department I needed and confirming my tax details with them. The agent I spoke with actually helped me resolve my specific Schedule F/C question and referenced my previous filings, so it was definitely the actual IRS.

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Carmen Lopez

•8M

I need to apologize for my skeptical comment earlier. After continuing to waste hours trying to reach the IRS about a similar farm income question, I broke down and tried the Claimyr service. I genuinely didn't believe it would work, but I was desperate. To my complete shock, I got connected to an actual IRS agent in about 15 minutes! They confirmed that for my specific situation (I have a small honey production business with a popular Instagram that generates sponsorship income), I should indeed separate the operations - Schedule F for the actual farm business and Schedule C for the content creation income. The agent even gave me specific guidance on handling shared expenses that benefit both operations. This saved me so much stress and uncertainty, and I'm embarrassed I was so dismissive before.

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Andre Dupont

•8M

One thing to consider that nobody's mentioned yet - if your YouTube channel is making significant income, you might want to look into setting up an LLC or S-Corp for that part of your business. We did this with our homestead YouTube channel once it started making more than $40k/year, and it helped with tax planning. You can still keep your farm as a separate entity (or sole proprietorship) on Schedule F, but having the YouTube business as an S-Corp might give you some additional tax advantages depending on your specific situation. We save about $7,500 annually in self-employment taxes this way.

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Andre Dupont

•8M

For us, the breakeven point was around $35-40k in annual YouTube income. At that level, the self-employment tax savings started to outweigh the costs of maintaining the S-Corp (extra tax return, payroll requirements, accounting fees, etc.). With your current $25k, you're probably still better off as a sole proprietorship on Schedule C for now, but if you're growing quickly, start talking to a CPA sooner rather than later. The transition timing matters, especially with setting reasonable officer compensation. We waited a bit too long and missed out on some potential savings in that transition year.

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Zoe Papanikolaou

•8M

I went through this last year! You absolutely CAN take Section 179 for farm equipment in your first year, even without farm income, as long as the equipment is put into service. The business use requirement is the key thing - if you're using the equipment 100% for the farm, you should be eligible. What tax software are you using? I had to override TurboTax to make it work correctly. Also make sure you're keeping detailed logs of how you're using the equipment for your farm business.

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Nia Johnson

•3M

This is a really interesting situation that's becoming more common! I'm dealing with something similar - I have a small organic vegetable operation that I'm documenting on TikTok and Instagram, and the social media income is actually outpacing my produce sales right now. From what I've researched and discussed with my accountant, keeping them separate (Schedule C for content, Schedule F for farm) seems to be the safest approach. The IRS likes clear distinctions between different types of business activities. Even though your YouTube content is about the farm, the income source is fundamentally different - you're being paid by Google for ad revenue, not by customers for farm products. One thing I'd add is to make sure you're tracking any equipment or expenses that serve both businesses. For example, if you buy a tractor that you use 80% for actual farming and 20% for filming content, you'll need to allocate those costs appropriately between the two schedules. Same goes for things like your phone if you're using it to film and manage both businesses. Also, don't worry too much about the farm showing losses initially - that's completely normal for startup agricultural operations. Just make sure you have a solid business plan showing how you intend to generate farm income in the future. The fact that you're actively working the land and making investments shows business intent rather than hobby activity.

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