Schedule F (Form 1040): Profit or Loss From Farming

Last reviewed: 2025-10-27

Use the Schedule F (Form 1040) — Profit or Loss From Farming (Tax Year 2024) Tax Form Calculator Schedule F (Form 1040) — Profit or Loss From Farming (Tax Year 2024) as a stand alone tax form calculator to quickly calculate specific amounts for your 2026 Schedule F state tax return. Alternatively, you can use one of our Combined Federal and State Tax Estimators to quickly calculate your salary, tax, and take-home pay.

Schedule F (Form 1040) reports profit or loss from farming by sole proprietors and certain partners. Use it to aggregate sales of livestock, produce, grains, and other farm products, plus cooperative distributions, agricultural program payments, crop insurance and disaster proceeds, and other farm income. Deduct ordinary and necessary farm expenses to determine net farm profit or loss that flows to your main return and may affect self-employment tax and other computations.

Who must file: Individuals with farm income or loss as owners or tenants, including single-member LLCs taxed as sole proprietors. If you are a landlord who materially participates, use Schedule F; if you only receive rent based on a share of production without material participation, see Form 4835.
Parts overview:
1. Part I: Farm income by category including sales of livestock and produce, agricultural payments, co-op distributions, crop insurance and federal disaster assistance, and other income.
2. Part II: Farm expenses such as feed, seed, fertilizer, chemicals, labor, machine hire, repairs, fuel, rent, interest, taxes, insurance, utilities, conservation, and other costs; attach Form 4562 for depreciation and section 179.
3. Part III: Cost of livestock and other items purchased for resale and changes in inventory if applicable.
Key definitions:
1. Material participation: Your participation level determines whether losses are nonpassive; most active owner-operators materially participate.
2. Prepaid farm supplies: Generally limited to 50% of other deductible farm expenses unless an exception applies.
3. CRP payments: Special rule for certain recipients of social security retirement or disability benefits regarding SE tax.
Timing and estimates: Farmers meeting the two-thirds gross-income test may use special estimated tax options, including filing and paying by March 1 instead of quarterly estimates.
Accuracy tips: Keep separate books, reconcile sales to settlement sheets and 1099s, track inventory movements, and maintain mileage, fuel logs, and substantiation for large repairs and capital assets.

Schedule F (Form 1040): Profit or Loss From Farming
Settings
	Accounting method:							Cash Accrual

Part I — Farm Income (Cash Method)	1a	Sales of purchased livestock and other items you bought for resale	1a
	1b	Cost or other basis of items on line 1a	1b
	1c	Subtract line 1b from line 1a	1c
	2	Sales of livestock, produce, grains, and other products you raised	2
	3a	Cooperative distributions (1099-PATR) total	3a
	3b	Taxable amount	3b
	4a	Agricultural program payments total	4a
	4b	Taxable amount	4b
	5a	CCC loans reported under election	5a
	5b	CCC loans forfeited (information)	5b
	5c	Taxable amount	5c
	6a	Crop insurance and federal disaster payments received	6a
	6b	Taxable amount	6b
	6d	Amount deferred from prior year	6d
	7	Custom hire (machine work) income	7
	8	Other income, including fuel tax credit or refund	8
	9	Gross income (cash method). Add lines 1c, 2, 3b, 4b, 5a, 5c, 6b, 6d, 7, and 8 (or use Part III line 50 if accrual method)	9

Part II — Farm Expenses (Cash and Accrual)	10	Car and truck expenses		10
	11	Chemicals		11
	12	Conservation expenses		12
	13	Custom hire (machine work)		13
	14	Depreciation and section 179 expense (attach Form 4562)		14
	15	Employee benefit programs		15
	16	Feed		16
	17	Fertilizers and lime		17
	18	Freight and trucking		18
	19	Gasoline, fuel, and oil		19
	20	Insurance (other than health)		20
	21a	Interest—mortgage (paid to banks, etc.)		21a
	21b	Interest—other		21b
	22	Labor hired (less employment credits)		22
	23	Pension and profit-sharing plans		23
	24a	Rent or lease—vehicles, machinery, and equipment		24a
	24b	Rent or lease—other (land, animals, etc.)		24b
	25	Repairs and maintenance		25
	26	Seeds and plants		26
	27	Storage and warehousing		27
	28	Supplies		28
	29	Taxes		29
	30	Utilities		30
	31	Veterinary, breeding, and medicine		31
	32a	Other expenses		32a
	32b	Other expenses		32b
32c	Other expenses		32c
32d	Other expenses		32d
32e	Other expenses		32e
32f	Other expenses		32f
33	Total expenses. Add lines 10 through 32f		33
34	Net farm profit or (loss). Subtract line 33 from line 9		34
36	At-risk rules		36	All investment is at risk Some investment is not at risk

Part III — Farm Income (Accrual Method)	37	Sales of livestock, produce, grains, and other products		37
	38a	Cooperative distributions total		38a
	38b	Taxable amount		38b
	39a	Agricultural program payments total		39a
	39b	Taxable amount		39b
	40a	CCC loans reported under election		40a
	40b	CCC loans forfeited (information)		40b
	40c	Taxable amount		40c
	41	Crop insurance proceeds		41
	42	Custom hire (machine work) income		42
	43	Other income		43
	44	Add lines 37, 38b, 39b, 40a, 40c, 41, 42, and 43		44
	45	Inventory at beginning of year		45
	46	Purchases during year		46
	47	Add lines 45 and 46		47
	48	Inventory at end of year		48
49	Cost of products sold		49
50	Gross income (accrual method). Subtract line 49 from line 44		50

Income categories that often need special treatment: Crop insurance and federal disaster payments may be deferrable to the following year if you normally report income from those crops in the later year and you meet the specific criteria; document the election and supporting facts. Cooperative distributions can include qualified written notices of allocation; report patronage dividends and per-unit retains in the proper lines and retain year-end statements for reconciliation.

Deduction hotspots on Part II: Distinguish current repairs from capital improvements; capitalize and depreciate assets that add value or extend life. For fuel and oil, keep gallons and equipment logs. For hired labor, align totals with payroll filings and worker-classification rules. Conservation expenses and soil and water expenditures have eligibility limits; verify they relate to land used in farming and meet the specific requirements to deduct.

Inventory, COGS, and production animals: If you maintain inventories, choose and apply an accepted method consistently. Livestock purchased for resale generally go through cost of goods sold; raised breeding and dairy animals are capital assets and typically depreciated when placed in service. Document births, deaths, purchases, and sales to support quantity and basis figures.

Capital assets and depreciation: Use Form 4562 to claim section 179 and bonus depreciation where eligible; confirm business-use percentages for mixed-use assets (trucks, ATVs, shop equipment). For buildings and land improvements, use appropriate recovery periods; attach statements for large additions and dispositions and reconcile to Schedule F expense categories.

Self-employment and averaging interactions: Net profit flows to Schedule SE. Farmers may use the optional methods of figuring SE income in limited cases to preserve benefit eligibility or avoid very low credits; test outcomes before filing. Consider Schedule J (income averaging for farmers) when current-year income is volatile relative to prior years, as it may reduce total tax even when NIIT or phaseouts apply elsewhere.

Last reviewed: 2025-10-27: If you believe this form requires an update, please contact us.

Tips for Efficient Filing

Map every settlement sheet and co-op statement to a Schedule F line and keep a yearly index of buyers, loads, dockage, and check stubs. Maintain a capital asset register with dates placed in service, cost, business-use percentage, method, and life. For inventory users, reconcile quantities and values at year-end and document any method change approval if applicable.

Before filing, run a cross-form check: tie depreciation to Form 4562, rentals to any 1099 filing obligations, CRP and program payments to agency records, and vehicle use to contemporaneous logs. If using the two-thirds farmer test for estimated taxes, verify eligibility and calendar the March 1 option. Where losses occur, confirm material participation to support nonpassive treatment and evaluate excess business loss limitations.

Best Practices & IRS Compliance Strategy

Set policy thresholds for capitalization vs repair, prepaid supplies, and substantiation (for example, written quotes for large repairs, appraisals for breeding stock, and photos or serial numbers for equipment). Document related-party transactions at arm’s length and keep written leases for land and equipment. Review casualty, storm, or disease losses promptly for potential elections and filing needs.

Annually review prior-year carryovers and elections: section 179, passive losses, NOLs, deferred crop insurance, and general business credits tied to farm activity. Consistency across books, Schedule F, Schedule SE, Schedule J, and Form 4562 reduces exam risk and protects valuable deductions. Maintain records for at least three years, longer for assets and carryovers.

Frequently Asked Questions

Can I estimate the General Business Credit?

Start with Form 3800 and then reflect the credit here.

How much would a 401(k) contribution change my net?

Model it with the 401(k) Calculator then rerun this page with your pre-tax amount.

Considering an IRS Offer in Compromise?

Read through Form 656-B to understand eligibility and steps.

What does FICA include?

FICA includes Social Security and Medicare payroll taxes withheld from employee wages.

Is there a quick pay-frequency comparison?

Yes—switch frequency on this page; for employer filings see 941 vs 944.

Important Notes

All calculations are estimates for guidance only. Always review your return and consider professional advice when submitting official filings.