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Taxes: A Farmer’s Perspective

Taxes: A Farmer’s Perspective. AAE 320. Goal. Understand for a practical perspective how major types of taxes work for farmers. Taxes paid by Farmers. Property (real estate) taxes Sales taxes Employment taxes Income taxes Self-employment taxes Gift taxes Death (estate) taxes.

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Taxes: A Farmer’s Perspective

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  1. Taxes: A Farmer’s Perspective AAE 320

  2. Goal • Understand for a practical perspective how major types of taxes work for farmers

  3. Taxes paid by Farmers • Property (real estate) taxes • Sales taxes • Employment taxes • Income taxes • Self-employment taxes • Gift taxes • Death (estate) taxes Our focus in AAE 320

  4. Income Taxes • IRS form 1040: Income taxes (see handout) • Page 1: List income sources • Wages/salaries • Interest/dividends (Schedule B) • Business income (Schedule C or C-EZ) • Capital Gain/Loss (Schedule D) • Farm Income/Loss (Schedule F) • Adjustments • Deductible part of SE Tax (Schedule SE) • Adjusted Gross Income (AGI): Bottom Page 1

  5. Income Taxes • Page 2 Form 1040: Taxes and Credits • Itemized Deductions (Schedule A) • If choose to itemize, deduct property taxes paid and mortgage interest on home here • Calculate Taxable Income • Brackets in 2011 Progressive Tax: pay 10% on the first $8,500 earn, then 15% on the next $26,000 earn, etc.

  6. Other Taxes • Self-Employment Tax: Form 1040 line 56 (Schedule SE) • Not on Form 1040 • Property taxes, Sales taxes, Employment taxes • Gift Taxes: of you give something to someone, you may owe gift tax (Gift tax return form 709) • Estate tax: when you die, your estate may owe taxes (Estate tax return form 706)

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