The following expenses are allowable deductions from gross self-employment income:
Car and Truck Expenses
- Allow the business portion of expenses for:
- Gasoline
- Oil
- Repairs
- Insurance
- Parking Fees
- Tires
- Rental Fees
- Garage Rent
- License Plates
- Allow a deduction for vehicle registration, prorated for 12 months.
Conservation Expenses
- Deductible soil and water conservation expenses are those that are paid to conserve soil and water or to prevent erosion of land used for farming AND
- This deduction may not exceed 25% of the gross income from farming
Custom Hire (Machine Work)
- Amounts paid for custom hire or machine work (the machine operator furnished the equipment)
Employee Program Benefits
- Contributions made to employee benefit programs that are not an incidental part of a pension or profit-sharing plan
Feed Purchases
- Expenses for feed that was consumed by the livestock in the current year, including prepaid farm supplies AND
- Deduct the expense for prepaid farm supplies that does not exceed 50% of the other deductible farm expenses in the year of payment
Fertilizers and lime
- Cost of fertilizer, lime, and other materials applied to farmland to enrich neutralize or condition it
Freight and Trucking
- Costs of freight and trucking
Gasoline, fuel and oil
- Cost of gasoline, fuel and oil used for farming
Insurance Premiums
- Premiums paid for farm business insurance
Interest
- Interest paid to banks or other financial institutions for a mortgage on farmland or other obligations incurred in the farm business AND
- If the proceeds of a loan are used for more than one purpose (for example, personal and business), allocate the interest on that loan to each use AND
- Only allow the portion of the interest payment that is the farm expense.
Labor Hired
- Amounts paid for farm labor
Pension and Profit-Sharing Plans
- Contributions made to employee pension, profit-sharing, or annuity plans for employees of the farm.
Rent or Lease Payments
- Business portion of the rental cost for rented or leased vehicles, machinery, or equipment.
Repairs and Maintenance
- Amounts paid for repairs and maintenance of farm buildings, machinery, and equipment.
Seeds and Plants Purchased
- Costs of seeds and plants purchased for further development and cultivation before sale
Storage and warehousing
- Costs for storage and warehousing
Supplies purchased
- Costs of supplies and materials used in the farming.
Taxes
- Taxes paid by the Farm:
- Real estate and personal property taxes on the farm business assets
- Social Security and Medicare taxes paid to match what was required to be withheld from farm employees wages
- Federal unemployment taxes
- Federal highway use taxes.
Utilities
- Amounts paid for gas, electricity, water, etc., for business use on the farm.
Veterinary, Breeding, and Medicine
- Veterinary, breeding and medicine costs
Advertising and Promotional Fees
- Amounts paid for advertising and promotional fees
Office Expenses
- Expenses paid as operating costs of an office
Qualified clean-fuel vehicle property
- Cost of qualified clean-fuel vehicle property
Legal and Professional services
- Legal and professional fees that are ordinary and necessary expenses directly related to operating the farm