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Corn+Soybean Digest

Timely Tax Tip

Ohio State University Extension has made available several Farm Income Tax Management fact sheets for producers and landowners who may need tax management tips.

The topics include government payment programs, income averaging, home office deduction, frequently asked agricultural questions, conservation programs and farm trucks, the last two of which are new fact sheets for this year.

Farm Income Tax Management: Conservation Programs fact sheet describes the various USDA-sponsored soil and water conservation programs that make available cost-share payments, which may be deductible or excluded from income. Some of these programs include the Conservation Reserve Program, Conservation Reserve Enhancement Program, Wetlands Reserve Program, Emergency Conservation Program, Emergency Watershed Program, Wildlife Habitat Program and Forestry Incentives Program.

"The information attempts to illustrate that not all conservation program expense items are treated the same way," says Robert Fleming, an Ohio State extension farm management district specialist.

For example, most conservation programs, such as the Conservation Reserve Program and the Conservation Reserve Enhancement Program, are eligible for expense deductions, but cannot be excluded from a farmer's income. Other programs, such as the Wildlife Habitat Program and the Forestry Incentives Program can be excluded from a farmer's income, but the expenses cannot be deducted.

Fleming said that farmers should be aware of which programs their income and expenses fall under for proper reporting.

Another area that receives frequent questions is how to properly report the use of farm trucks. Fleming said that several factors are involved that may affect the allowable depreciation of a farm truck, including the vehicle's gross weight and its potential designation as "listed property", if it is not used more than 50% of the time in a business.

"There are many farmers who use their vehicles for personal travel, as well as business. This newsletter is designed for those who use their vehicles for business purposes only," says Fleming.

For more information, log on to and click under "farm management."

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