Farm tax organizer for Schedule F: sales, livestock, labor and payments
By Arthur Teboul, DokuTrak · Published
In brief
A farm tax organizer asks a farmer the questions Schedule F and its side forms depend on: products raised or bought for resale, cooperative and USDA payments, crop insurance, livestock held for breeding, farm labor and equipment. Each answer names the settlement sheet, statement or invoice the preparer needs.
The organizer: Farm tax organizer (Schedule F)
Use one organizer per farm operation. If you only rent out land for a crop share, answer the first group and stop there.
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The farm operation
Based on: Schedule F, lines A to G; Publication 225, chapter 2
- Farm name, principal crop or livestock, and EIN if the farm has one
- Accounting method: cash or accrual
- Do you only rent your land to a tenant for a share of the crop or livestock?If yes, send: Farm lease; Settlement sheets for the share you received
- Did you materially participate in running the farm this year?
- Did the farm show a loss in two or more of the last five years?If yes, send: Prior-year returns; Business plan or records showing how the farm seeks a profit
Sales and cooperative income
Based on: Schedule F, Part I; Form 1099-PATR
- Sales of crops, produce, milk, eggs and livestock you raisedIf yes, send: Settlement sheets and sales records for the year
- Did you sell livestock or other items you bought for resale?If yes, send: Purchase invoices and sale records for each lot
- Did you receive a Form 1099-PATR or a per-unit retain certificate from a cooperative?If yes, send: Every Form 1099-PATR and retain certificate
- Did a buyer send you a Form 1099-MISC or 1099-NEC?If yes, send: Every Form 1099 received
- Were you paid in goods or services instead of cash?If yes, send: Description and fair market value of what you received
Government payments and crop insurance
Based on: Schedule F, lines 4 to 8; Publication 225, chapter 3
- Did you receive USDA program payments?If yes, send: Form 1099-G or the agency payment statements
- Did any USDA payment reported to you belong partly to someone else?If yes, send: Name of the other person and their share
- Did you take out or repay a Commodity Credit Corporation loan?If yes, send: Loan and repayment statements; How prior returns reported CCC loans
- Did you receive crop insurance or disaster payments?If yes, send: Payment statement with the date received; Date the crop was damaged
- In a normal year, in which year do you sell the crop that was damaged?
- Did you receive conservation cost-share payments?If yes, send: Program contract and payment statement
Livestock held for draft, breeding, dairy or sport(if it applies)
Based on: Form 4797; Publication 225, chapter 9
- Did you sell cattle or horses held for breeding, dairy, draft or sport?If yes, send: For each animal: raised or bought, date acquired, date sold, sale price
- Did you sell other breeding or dairy animals, such as hogs, sheep or goats?If yes, send: For each lot: raised or bought, date acquired, date sold, sale price
- Did you lose animals to disease, drought or a disaster?If yes, send: Records of the loss and any insurance paid
Farm expenses
Based on: Schedule F, Part II
- Feed, seed and plants, fertilizer and lime, and chemicals
- Custom hire, machine work, storage, warehousing and freight
- Fuel, repairs and maintenance, supplies and utilities
- Rent paid for land, buildings, machinery or equipment
- Veterinary, breeding and medicine costs
- Did you pay farm supplies in advance for next year?If yes, send: Invoices showing what was prepaid and when it will be used
- Did you use fuel off the highway in tractors or other farm machinery?If yes, send: Fuel receipts with gallons
Labor
Based on: Form 943; Forms W-2 and 1099-NEC
- Did you pay wages to farmworkers?If yes, send: Form 943 and payroll reports; Forms W-2 and W-3; Form 940, if filed
- Did you pay contract or custom labor of $2,000 or more to anyone?If yes, send: Form W-9 for each contractor; The Forms 1099-NEC you filed
- Did you employ seasonal or H-2A workers?If yes, send: Payroll records for those workers
Equipment, land and payments
Based on: Form 4562; Form 4797; Publication 505
- Did you buy or sell machinery, vehicles, buildings or land?If yes, send: Invoices, bills of sale or closing statements; Prior-year depreciation schedule
- Did you trade in equipment?If yes, send: Trade-in agreement with the value given
- Gross income from farming, and from all other sources, for this year and last year
- Did you make an estimated tax payment for the year?If yes, send: Date and amount of the payment
- Do you want the preparer to look at farm income averaging?If yes, send: Returns for the three prior years
Who this organizer fits, and who needs Form 4835 instead
Schedule F reports farm income and expenses (IRS, About Schedule F (Form 1040), Profit or Loss From Farming). It fits an owner or tenant who works the farm, whether as a sole proprietor or through a single-member LLC treated as disregarded. A partnership or corporation farm files its own entity return, so its owners need the entity organizer as well.
A landowner who rents land for a share of the crop is a different case. Income from a crop share or livestock share rental is reported on Form 4835 and carried to Schedule E (IRS Publication 225 (2025), Farmer’s Tax Guide). The first question in the organizer sorts these two cases, so a landlord does not fill in pages on labor and fuel.
Family items such as wages from a town job, a child’s tuition or a mortgage belong in the individual tax organizer. If the farm is only part of a larger business, see the self-employed tax organizer for the non-farm side.
Sales of what you raised, and what you bought to resell
Sales of livestock, produce or grain raised for sale or bought for resale are reported on Schedule F (IRS Publication 225 (2025), Farmer’s Tax Guide). That includes cash and the fair market value of goods or services received in trade (IRS Publication 225 (2025), Farmer’s Tax Guide). For items bought for resale, the profit is the sale price minus the purchase cost, so the organizer asks for both.
Cooperatives add their own paperwork. Patronage dividends are refunds a cooperative pays to members based on what they bought or sold through it, and they are generally Schedule F income in the year received (IRS Publication 225 (2025), Farmer’s Tax Guide). The cooperative reports them on Form 1099-PATR or a similar form (IRS Publication 225 (2025), Farmer’s Tax Guide). Ask for every Form 1099-PATR and every per-unit retain certificate.
USDA program payments, CCC loans and crop insurance
The USDA reports program payments to the IRS (IRS Publication 225 (2025), Farmer’s Tax Guide). A payment meant for several people is reported to the payee of record, who reports the total but not the share belonging to others (IRS Publication 225 (2025), Farmer’s Tax Guide). So the organizer asks whether any payment was passed on to a partner or landlord.
A CCC loan is a Commodity Credit Corporation marketing assistance loan secured by a pledged commodity (IRS Publication 225 (2025), Farmer’s Tax Guide). It comes with a method question. A farmer who reports a CCC loan as income in the year received must generally keep doing so in later years (IRS Publication 225 (2025), Farmer’s Tax Guide). The preparer needs to know which method the prior returns used.
Crop insurance proceeds are generally income in the year received (IRS Publication 225 (2025), Farmer’s Tax Guide). A cash-method farmer can elect to postpone them to the next year when more than half of the income from the damaged crop would normally be reported in a later year (IRS Publication 225 (2025), Farmer’s Tax Guide). The organizer asks for the date of damage, the payment date and how the crop is usually sold.
Livestock held for draft, breeding or dairy
Animals kept to work, breed or milk are not inventory, and their sale usually goes on Form 4797 rather than Schedule F. Such a sale is a section 1231 transaction if the animals were held 12 months or more, or 24 months or more for cattle and horses (IRS Publication 225 (2025), Farmer’s Tax Guide). That is why the organizer asks for the purchase date or birth date of each animal sold.
Raised livestock is stock born on the farm, as opposed to animals bought. The distinction changes the basis the preparer uses, so ask the farmer to mark each sold animal as raised or purchased.
| Animal sold | Question to ask | Where it usually goes |
|---|---|---|
| Bought for resale | Purchase date and cost, sale date and price | Schedule F, as a sale of items bought for resale (IRS Publication 225 (2025), Farmer’s Tax Guide) |
| Raised for sale | Sale settlement sheets | Schedule F, as sales of products raised (IRS Publication 225 (2025), Farmer’s Tax Guide) |
| Cattle or horses for draft, breeding, dairy or sport | Raised or bought, date acquired, date sold | Form 4797 when held 24 months or more (IRS Publication 225 (2025), Farmer’s Tax Guide) |
| Other breeding or dairy animals | Raised or bought, date acquired, date sold | Form 4797 when held 12 months or more (IRS Publication 225 (2025), Farmer’s Tax Guide) |
Farm labor, fuel, equipment and the estimated tax rule
A farm employer files Form 943 if it paid wages to one or more farmworkers subject to income, Social Security and Medicare taxes (IRS, About Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees). Contract labor is handled apart: a Form 1099-NEC is required at $2,000 or more for payments made after 2025 (Instructions for Forms 1099-MISC and 1099-NEC). The organizer asks for both, along with the W-9 behind each contractor.
Fuel used off the highway, for example in tractors and combines, can support a fuel tax credit, so the organizer asks for gallons and receipts (IRS Publication 225 (2025), Farmer’s Tax Guide). Equipment, buildings and land bought or sold need invoices and closing statements, plus the prior year’s depreciation schedule.
Farmers get their own estimated tax schedule. If at least two-thirds of gross income for 2025 or 2026 is from farming or fishing, the only 2026 due date is January 15, 2027 (IRS Publication 505 (2026), Tax Withholding and Estimated Tax). A qualifying farmer who files by March 1, 2027 and pays all tax due then needs no estimated payment (IRS Publication 505 (2026), Tax Withholding and Estimated Tax). The organizer therefore asks for gross income by source.
Questions people ask
What are the estimated tax rules for farmers?
If at least two-thirds of gross income for 2025 or 2026 came from farming or fishing, the only 2026 payment is due January 15, 2027 (IRS Publication 505 (2026), Tax Withholding and Estimated Tax). Filing by March 1, 2027 and paying everything due removes the payment (IRS Publication 505 (2026), Tax Withholding and Estimated Tax).
Is a landowner who receives a crop share a farmer for tax purposes?
Rental income based on crop or livestock shares is reported on Form 4835 and carried to Schedule E, not Schedule F (IRS Publication 225 (2025), Farmer’s Tax Guide). The landowner’s organizer then centers on the lease and the share received.
How are livestock sales split between Schedule F and Form 4797?
Animals raised or bought for sale go on Schedule F (IRS Publication 225 (2025), Farmer’s Tax Guide). Draft, breeding, dairy or sporting animals held 12 months or more, or 24 months for cattle and horses, qualify as section 1231 sales (IRS Publication 225 (2025), Farmer’s Tax Guide).
Can a hobby farm deduct losses?
A farm is presumed to be run for profit if it made a profit in at least 3 of the last 5 tax years, including the current one (IRS Publication 225 (2025), Farmer’s Tax Guide). For horse breeding, training, showing or racing, the test is 2 of the last 7 years (IRS Publication 225 (2025), Farmer’s Tax Guide). Otherwise, the farmer may need to show it is run as a business.
Sources
- IRS Publication 225 (2025), Farmer’s Tax Guide: Farm sales, Form 4835 rentals, patronage dividends, USDA payments, CCC loans, the crop insurance election, livestock holding periods, fuel tax credits and the profit presumption.
- IRS, About Schedule F (Form 1040), Profit or Loss From Farming: Schedule F is used to report farm income and expenses.
- IRS, About Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees: Form 943 is filed by an employer that paid wages to one or more farmworkers subject to income, Social Security and Medicare taxes.
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax: Farmers with at least two-thirds of gross income from farming have one 2026 due date, January 15, 2027, or none if they file and pay by March 1, 2027.
- Instructions for Forms 1099-MISC and 1099-NEC: For tax years beginning after 2025, the reporting threshold for these payments is $2,000.
About the author
Arthur Teboul (Founder, DokuTrak) is building DokuTrak after watching professionals lose hours chasing clients for documents over email. Arthur Teboul.
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How this page was made (methodology): it is built from the primary sources listed under Sources, and every rule and figure on it links to the source it comes from. Last updated October 25, 2026. Spotted an error or a rule that changed? Contact us.
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