Preparing Your Farm for Tax Season
For those of you who filed an extension on your taxes, Tax Extension Day (October 15) is right around the corner! For the rest of you, tax season might seem like a far-off concern, but it’s never too early to start getting your farm’s finances in order. While we’re not CPAs and this isn’t official tax advice, we’re here to share some best practices we’ve seen help farmers navigate this time of year. Think of this as a helpful guide rather than a strict rulebook—and consider consulting a professional for specific guidance tailored to your situation. Understanding Tax Forms First up, understanding the key tax forms for farmers is crucial. The Schedule F—Profit & Loss From Farming—is specifically for farmers. If you’re working with a non-agriculture CPA, make sure they’re using this form instead of Schedule C for your farm income. Schedule C is meant for other types of businesses; make sure you fill out the correct one. You’ll also need Form 4562 for depreciation, which covers the gradual expense of capital assets. Depreciation can get complicated, so a simple “half-year straight line depreciation” method might be a good start if you’re handling it yourself. For personal tax returns, Form 1040 will be essential, especially since farm income often shows up here if your farm is an LLC. If you have any side businesses—like value-added products or agritourism—don’t forget Schedule C for those ventures. And for anyone employing staff or contractors, W-2s and 1099s need to be filed by January 31. Most payroll software can handle these automatically, but be sure to keep an eye on deadlines. Quarterly Tax Payments Profitable businesses (those that owe some income tax) are required to make estimated quarterly tax payments. Farms are only required to make one estimated payment by January 15 (per the IRS, you’re a farm if at least two-thirds of your gross income is from farming). No need to worry about payments in April, July, and October. When you file your official, final tax return on April 15 (or October 15, if you’re reading this blog post), your payment from your estimated payment will be taken out of what you owe. How to Maximize Your Deductions Maximizing your deductions is all about meticulous record-keeping. Don’t overlook joint personal and farm expenses if you live on the farm—items like mortgage interest and utilities could be partly deductible. Vehicle mileage is also worth tracking, especially if you have older vehicles. And keep in mind, while loan principal isn’t deductible, loan interest is. Cash expenses should be noted too. Keeping your receipts is vital—aim for the last seven years. Whether you use physical folders or an online receipt management tool like Hubdoc, having organized records will make tax season smoother. When it comes to depreciation, understand that capital assets—like breeding stock or equipment—need to be depreciated over their useful life. Agriculture depreciation can be tricky, with different methods available. If you have significant capital to depreciate, consulting a CPA might be worth the investment. Don’t forget about state and local taxes. Most states offer agriculture property tax exemptions, but you need to apply for them. Also, check your local regulations on sales taxes for agricultural products and any exemptions that might apply to your farm purchases. We hope this guide gives you a solid starting point. Remember, we’re not tax professionals, but we want to help make this season a little less daunting. For tailored advice, always consult with a certified professional. National Farmer’s Day Special We aren’t tax professionals, but we do help you get your bookkeeping in order to ease into a smooth tax season. We are offering a special for farmers to join our Financial Management service for 20% off your first three months until October 12. Here’s a reason why our farmers never leave us because we save them time (5-10 hours weekly) and money (on average our farmers are 5% more profitable). If you want to get started, fill out the form below and here’s to a smooth tax season ahead! Get Started Today
The Numbers Make Cents
Our Financial Management Service is turning the financial tides for our farmers. If you’re not a numbers person (and let’s face it, who really is?), we’re breaking it down, so that we’re not just ranting and raving about our stats. So, what’s going on? As part of our anniversary celebration last month, we took a deep dive into the monthly finances of our customers with at least six months of work with us. We wanted to see how our financial wizardry has been working for them. Before Working with Us Our farmers were feeling a bit like their wallets had holes in them. On average, they were operating at a loss. But then we stepped in with our Financial Management Service, and things started looking up. After Working with Us Drumroll, please! Our farmers are now seeing a 5% increase in revenue. That’s right—what used to be an average monthly revenue of $97,100 has jumped to $101,600. That’s an extra $4,500 in their pockets each month! If we take a closer look at just our smaller farmers, they’re seeing a remarkable 27% increase in revenue, with average monthly revenue jumping from $8,100 to $10,300. This means an additional $2,200 each month for these dedicated farmers! We know every farm is as unique, so we looked at the numbers for our “median” farmer—the one right in the middle of the pack. Guess what? Their profit margins have improved by 2 percentage points since they started working with us. But wait, there’s more! Our long-term customers—those who’ve been with us for over a year—are seeing their farms become more profitable. These dedicated farmers have seen their profits go up by 16% on average. And we wanted to see if we were providing a good value for our farmers. We calculated that our customers had seen a 1500% ROI on their investment with us — for every $1 they spent on our financial management, they have gotten $15 more profitable on average! Saving Money AND Time And here’s a little secret: it’s not just about the dollars and cents. Our Financial Management Service is also saving our farmers a whopping 5 to 10 hours of work every single week. That’s time they can spend time doing what they love—whether it’s planting, harvesting, or just taking a well-deserved break. It’s not just about numbers—it’s about giving you the time and peace of mind to focus on what really matters. Happy farming, and here’s to a future full of financial growth! Here’s the obligatory form that marketing makes us put in:
Celebrating Two Years of Helping Farmers and Ranchers
Reflecting on the past two years and looking ahead towards the future. Every decision we make at Good Agriculture is centered around our farmers. Our mission is plain and simple: we’re here to make sure you succeed. Get FREE 30 Day Trial for our Funding Notification Service Happy Birthday to Us! The past two years have been a wild ride… The median farmer who used our financial management service had a 2 percentage point increase in profit margins. Our grants team has won nearly $1 million in funding for our farmers. Every farmer who’s worked with us is still in business and we’re still helping them manage their companies so they can manage their farms. When you win, we win. That’s why everything we do is aimed at helping you thrive in what you do best—farming. Why We Do It Our recent milestones really hit home for us. First, we finally figured out how to measure across our farmers and realized that our customers are 6% more profitable than they were before they started working with us. And second, we won two major grants that brought our total won to date to just shy of $1 million ($980,000, to be exact). We can do that because we are farmers – and those of us who aren’t farmers, we make sure they get some dirt based hazing every so often. You can’t serve farmers without knowing what it’s like to have dirt embedded into your fingerprints. Partnering for Success with Harvest Returns Just a few months back in March, we teamed up with Harvest Returns, a leader in agricultural investing. Partnering with Harvest Returns was a natural step forward in our mission to empower farmers and ranchers across the country. Harvest Returns brought a wealth of expertise and resources in agricultural investing, specializing in connecting investors with sustainable farm operations. Their platform facilitates access to crucial capital that many farmers need to expand and thrive. UGA Partnership and Beyond Then in April we joined forces with the University of Georgia’s (UGA) Value-Addition Institute for Business Expansion (VIBE). UGA was granted a $1.5 million grant from the USDA, to grow Georgia’s rural food businesses. We’ll be working to help them on personalized support to hands-on workshops, and we’re paving the way for new opportunities for those farmers to get support. Launched the Funding Notification Service In May we launched our new Funding Notification Service (FNS). We tailor emails so you will only receive local, regional and national funding opportunities that are relevant your farm. We want to offer it to you FREE for 30 days, you can sign up here, or fill out the form below. (Yes, our marketing team made us add this in here.) Our FNS is designed with one goal in mind: to simplify the process of finding funding opportunities for farmers. We handle the legwork of researching and compiling information, allowing you to make informed decisions without the stress of constant research. When you have a grant and project in mind, reach out to us. We need you to know what you want to do, but once you have a project and grant in mind we’re happy to help you turn it into a winning application. Coming Up – What if Data Collection Were Easy? Imagine telling your phone “We just harvested 495 lbs of radishes from Row 19, Field B” and being able to see that these are French Breakfast Radishes planted 42 days ago with seed from Johnny’s; the field was amended with 7% potash prior to planting; it rained twice totaling 1 inch and irrigation ran another three times; this field was cultivated twice while the radishes were in the ground; this is a 17% reduction in yield from what was projected. Your farm data, easily collected and curated so all you have to do is narrate your actions and observations. We’re going to be building out version one of this tool over the next 8 months. ATTN Georgia Farmers: If you’re growing lettuce within a 2-hour drive of Atlanta this fall, reach out – we’re recruiting 10 farmers to help us shape version one, and it’ll hopefully roll out to a wider audience in 2025! Looking Ahead We’re not just another service provider—we’re your neighbor with over 15 years of experience in marketing, grant writing, and financial management. We’re here to help you thrive in a tough industry. So, let’s keep this momentum going together. Reach out to us today and let’s chat about how we can support your farm’s unique needs. Your farm’s success is our success Get First 30 Days FREE: Funding Email Alerts FREE TRIAL FOR 30 DAYS. Who’s missed a deadline to apply for funding? It’s one thing to get a list of programs you’re eligible for – they may not be open, and you have to track each one to know when they’re open and apply. And when things get busy and you forget to check, whoops, you just missed your window. There’s over $11 billion in funding for farmers in the US, and we want to help you get what you’re eligible for. That’s why we created the Funding Notification Service. We want you to try it 30 days free. For just a $3/month, we’ll let you know when the programs you’re eligible for are open. How does this work? 1) Fill out the form below. 2) You take the farm funding eligibility survey, and the results with your general eligibility are on their way to your inbox. You need to do this in order to receive our weekly email. 3) Decide whether to apply! You’re free to do the application yourself, check in with us for some quick guidance, hire someone else to write for you or have us handle the entire application!
From Grass to Green: The Power of Rotational Grazing
Have you ever wondered how cows could become environmental allies? It’s not just a fantasy; it’s a practical strategy that’s reshaping farms and landscapes. Enter rotational grazing – an open secret that’s been hiding in plain sight, which benefits for ranchers, cattle, and the environment. Rotational grazing challenges the traditional continuous grazing approach of letting cows stay in one big field all the time. Instead, it means moving them around to different smaller areas. It’s like giving each patch of grass a break while the cows munch on fresh grass elsewhere. This strategy allows forage plants to rest and regrow, which leads to impactful benefits on the Earth and farm. But why listen to us? We handle the business side of farming, so we reached out to farmers we work with to hear about their practices. Jake Puckett from Crow Fly Farms who’s embraced a holistic management style and uses rotational grazing, shares his experience, “By mimicking natural systems, you can greatly reduce inputs by placing animals in an environment where they thrive. Our animals are getting a more diverse diet because they are constantly on the move and less selective with their grazing.” “Extended recovery periods and animal impact allows us to produce more forage in our pastures than other more conventional operations. Root systems are able to reestablish and benefit from the concentration of fertilizer provided by our cattle and sheep. We move our animals to new paddocks every day and shoot for 45-60 days of recovery before returning to the same area. We’ve seen dramatic changes in forage quantity and quality since implementing this practice,” he added. What exactly makes rotational grazing so beneficial? The answer lies in its many advantages: Improved Forage Quality and Yield: By allowing forage time to regenerate, rotational grazing enhances the nutritional quality and volume of available feed, benefiting both the cattle and the overall ecosystem. Enhanced Forage Utilization: Cattle graze more evenly across different forage types, reducing overgrazing in certain areas while promoting healthier growth in others. Soil Health Boost: Rotational grazing stimulates soil microbial activity, improves water retention, and aids in carbon sequestration, leading to healthier pastures and enhanced environmental resilience. Cost Reduction: Healthier pastures mean reduced dependency on herbicides, fertilizers, and winter feed, translating to significant cost savings for ranchers. The Challenges While the benefits are clear, transitioning to rotational grazing isn’t without its challenges. Initial infrastructure investments and the need for increased management time are common hurdles. However, with support from programs like the Environmental Quality Incentives Program (EQIP) offered by the Natural Resource Conservation Service (NRCS), ranchers can receive financial assistance and technical guidance to ease the transition. Carbon Credits We understand that for your farm to flourish financially, you need a balance of earning and saving. Carbon credits and certifications like the Regenerative Organic Certified® mark are more than just badges of honor. They bring tangible benefits to your farm, including enhanced credibility in the farmer’s market, access to premium markets and buyers, and a clear demonstration of your commitment to environmental stewardship. These credentials not only validate your efforts but also open doors to new opportunities, partnerships, and increased value for your products. Now, let’s meet Fernando Mendez from Marview Farms, a self-taught livestock farmer embracing regenerative practices. He reflects on his journey toward getting those carbon credits for his farm, “We’ve been practicing rotational grazing for a long time, and with Good Agriculture’s help, we’ve been able to earn carbon credits for our eco-friendly practices. They helped me navigate the complexities of the application process, securing credits that not only saved us paperwork headaches but also helped us save money.” At Good Agriculture, we understand the importance of sustainable farming practices like rotational grazing. Our services go beyond traditional consulting; we’re your partners in making your farm thrive. Whether it’s optimizing grazing strategies, navigating conservation programs, or streamlining operations, we’re here to support you every step of the way. In conclusion, embracing rotational grazing isn’t just about sustainable agriculture; it’s about securing a prosperous future for our farms, communities, and the planet. Together, let’s pave the way for a greener, more resilient agricultural landscape. Ready to take your farm to the next level? Reach out to us to see if we can help your farm become more profitable.
Celebrating Earth Day with 20% Off One-Time Services
Happy Earth Day from the Good Agriculture team! Every day is Earth Day for farmers and everyone working in agriculture, but it’s a great reminder for everyone else how much work goes into taking care of our planet while feeding the world. This Earth day, we’re celebrating our farmers. We’re giving our farmers 20% off our affordable one-time services. This is for farmers who simply need a hand on a business project during this busy growing season. We understand the challenges our farmers face, and our goal is to provide flexible solutions to support you all year (but especially for Earth Day). Get started with 20% off one-time service Earth Day is a great marketing opportunity Your farm is thriving, but your customers may have forgotten about you over the winter. Earth Day is a great opportunity to reconnect with customers, especially for sharing “good for the earth” messages. Are you selling local? Are you organic? Have you adopted conservation practices or have wildflowers growing on your farm? Your current and potential future customers would love to know about it! Here are some ideas for Earth Day marketing: Update your website with an “About Us” that shares your farming practices and any certifications you have Share photos on social media of blooming plants, newborn animals, and other signs of spring Send an email newsletter campaign to your customers letting them know when produce will be ready and where they can buy Write an article about your sustainable practices and reach out to local media to see if they can re-publish it or feature your farm Host an event on your farm to educate your community on taking care of the earth Promote an “Earth Day Special” (like we’re doing!) through free and paid channels Share a simple “Happy Earth Day” message on socials and encourage customers to make more eco-friendly choices Need help implementing any of these? We offer one-time marketing services like website updates, social media campaigns, and article-writing to help you take advantage of the holiday without losing any time on the farm! Sustainability initiatives require crunching the numbers, too Let’s say you’re considering going organic or trying pasture-raised poultry. You might be excited about the environmental impact, but you’re unsure about the financial impacts it’ll have on the farm—and your wallet. Here are some aspects to consider: Organic/sustainability products can usually get a price premium – but who’s going to buy this product? How hard is it going to be to enter that market? What price do you need to get to make a healthy profit margin? What price do you need to get to break even? Do those reflect the market prices today? Are you going to need a certification? There’s costs to those (certification costs, costs to make infrastructure updates) including the cost of your time! Are they worth it? What start-up costs will you have and how long will it take to pay back those start-up costs? If you need a loan to get started, how much will the loan cost in interest? What scale do you need to reach for the initiative to breakeven? Can you reach that scale with your current resources, or do you need additional infrastructure, labor, or equipment to reach it? What are the costs of those investments? What are the expected yield impacts on making a transition or getting through a learning curve? If the first few years don’t go as expected, can you financially survive it? How excited am I to do this? Is this where I want to spend my energy? Our financial management service includes a business case study tailored to your farm. We run scenarios, analyze financial data, and provide insights to help you make informed decisions about your farm business. And the projections will help you get a loan or grant if needed! There’s lots of grant funding for conservation Most of the $11B+ in grant, cost-share, and ecosystem credit funding available to farmers in the United States is tied somehow to conservation. Here are some of the biggest programs available for farmers: EQIP and CSP: these NRCS programs are cost shares for farmers to implement (EQIP) and maintain (CSP) conservation practices like rotational grazing, precision irrigation, and cover cropping. Each state has its own deadlines and priority practices, so contact your local agent or sign up for our Grant Notification Service to learn what’s happening in your state SARE and CIG: these programs fund on-farm research projects and prioritize conservation research. Got an idea to reduce chemical use, increase biodiversity, or improve soil health? Definitely apply to these! State and local initiatives: many big grant programs like the Climate Smart Commodities to get administered at the state and local level. Check out local experts like your conservation district to learn about these opportunities (our Grant Notification Service also has these) Ecosystem Service credits: these reward farmers with payments for conservation practices. The most common type is a carbon credit, which pays farmers for increasing their soil carbon levels. There are lots of different brokers and projects that offer these. This is still a new market; there’s not a lot of regulation yet, and a lot of uncertainty around future prices, but can be a great way to bring in more farm revenue. And if you need help, we help you both find and apply to this funding. Our grants service helps farmers find all these funding opportunities. Whether it’s grants for a research idea, cost-share programs for conservation initiatives, specialty crop block grant program, value-added producer grants, or marketing initiatives, we guide you through the process of accessing available funding sources. If you haven’t already, take our FREE grants survey to see what you’re eligible for. And if you’re looking to get tailored notifications for any an eligible grant is open, sign up for our Grant Notification Service. We are offering it for $1/mo. (for life!) if you sign up before April 30. To celebrate Earth Day and support farmers like you,
Mastering Your Farm Finances: A Step-by-Step Guide
This month, we’re diving into a fun topic that all farmers like to talk about: bookkeeping! …Wait, don’t everyone head for the exits at once! We get it. You didn’t go into farming to spend your days in front of a spreadsheet. Kirsten’s farm desk has a pile of receipts from 2022 tucked behind the monitor that she’ll get to… someday. But if you’re not in a position to hire someone to handle the books (or you don’t have a spouse willing to step up to the task) there are a few things you can do at the end of each year to make your life about ten thousand times easier when tax time comes. Organize Transactions Sometimes it’s easy to categorize a transaction. If it’s from the feed mill, it’s animal feed. A bill from the John Deere dealership probably involves equipment. But will you remember everything you pick up at Tractor Supply a few months from now? Try to take the time to sort through your transactions and income on a regular basis. The longer you put it off, the worse it gets, so bribe yourself with a drink if you have to and knock the task out quickly. Distinguish Between Business and Personal Expenses Do you have a separate bank account for your farm? You ought to. Even with separate accounts, it’s far too easy for an expense to end up on the wrong card. Sometimes money doesn’t get moved around fast enough, other times you’re moving fast and things get confused. When that happens, make sure you flag those transactions when you’re sorting through them. And take some steps to keep personal and business separate. It’s not silly if it works. At the moment, Kirsten has a monthly reminder to “Pay the damn dental insurance bill that can’t accept autopay” and a personal debit card colored with blue sharpie because both her personal and business debit cards were white. And don’t forget to add in your “personal” expenses that are really farm expenses! If you use live on the farm, make sure you count part of your mortgage/lease, utilities, and insurance toward the farm. If you ever drive a personal vehicle for farm duties, count (or estimate) your mileage. Categorize Expenses Appropriately When it comes to tax time, you’ll be filling out a Schedule F form. What that means is that you can save yourself some time by using the same categories for transactions that the Schedule F form uses (and they’re actually pretty useful). Those categories are … (warning, dry government language incoming): Sales of livestock, crops and other farm-related goods or services Equipment expenses and depreciation Conservation expenses Insurance and tax expenses Rent or lease for vehicles, land, etc. Labor and employment expenses Input, seed, fuel, crop insurance and other common farm operating expenses What if you want to track more categories? Use the “other” categories to track things like software, advertising, and animal processing that don’t fit any of the existing Schedule F categories. Track Income Sources You made money this year, right? Add it up, baby! Did it come from multiple places? It’s worth breaking down what you made and where it came from, if for no other reason than to know what makes you the most money. If you want to get fancy, you can try to coordinate your expense sub-categories with your income categories and figure out if you actually make a profit on each category. Understanding Financial Statements Profit and Loss! Cash Flow! Balance Sheets! They aren’t bogeymen, though it does feel like they sometimes coordinate with each other to trip up the unwary. Profit and Loss – Often referred to by those in the know as a P&L or an income statement, this is a way of looking at the overall finances for your farm. What money did you make, what did you spend, are you operating in the black or the red? (And that Schedule F you had to fill out? That’s a Profit and Loss statement!) Cash Flow – Do you have money when you need it? Cause if you need money in February and your crop doesn’t come in until April, and you don’t have a plan to cover expenses between February and April, you’ve got yourself a problem. Cash flow statements help you predict and plan for the lean times. Balance Sheet – This one is all about assets, liabilities and equity. It’s less of a tool to use in the moment than something you track over time to ideally see how your business is thriving. These aren’t the easiest to create on your own, but once you sort out your transactions, any accounting software (like QuickBooks or Xero) or accounting service (like Good Agriculture!) will create these automatically for you. If you’re handling your own books it may or may not be worth it to you to maintain each individually. That said, if you ever want to get a loan or any outside investment in your farm, you’ll need all of them. Depreciation and Loan Management Now we’re getting to the advanced stuff! You might be thinking “my Profit and Loss Statement shows I’m making a profit, so why do I need a cash flow statement? Shouldn’t my cash be good to go?” but it’s actually quite common for farmers to be profitable AND struggle with cash. Why is that? Farming requires a lot of upfront investment — big mortgage payments for the land, lots of expensive equipment, big investments into breeding stock if you’re raising livestock. The last thing you need to do for your year-end finances is calculate your depreciation and loans. “Depreciation” is a five-dollar word that means your equipment, infrastructure, and breeding stock have useful lives longer than one year, so you take a little bit of the expense every year. For example, if you buy a $70,000 tractor you expect to last you 7 years, the depreciated expense would be $10,000 per year for the
The Farmer’s Sense
It doesn’t get talked about often enough, but I honestly think that farmers have a superpower. I think farmers have a sixth sense. I call it “The Farmer’s Sense.”