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North central TX | This is a complicated thing. It means that you and your husband need to come to a decision about HOW to do your accounting. Everything, and I mean everything, farm related has to be tracked and accounted for. I'm not a "finance major" so I don't really understand the different accounting methods. I use a simple Jan 1-Dec 31 calendar year accounting system and dont try to split things by growing season(I don't raise any row crops anyhow). You guys may want to do Nov yr end or something to make crop inputs easier to account for.
For example, if I buy a new feed bin for my cattle feeding operation, but I'm in between turns when I do it, I might not try to account for the total cost in the new group. It's a long term use item and I therefore could divide the cost over 10 yrs and account that divided lump sum on each turn for 10 yrs. (I don't do that, because my off farm job takes LOTS of FICA out and I'm looking for ways to get it back at the end of the year, I only depreciate big ticket items like equipment and buildings)
I also have learned to keep meticulous track of my feed and other input costs now and can "run the numbers" across tax year breaks if I'm feeding across that time frame to keep up with the actual cost.
Ultimately, it sounds like you guys need to sit down and discuss record keeping, figure out an accounting software to use, and get serious about it. Then you can see exactly what's moving where and decide how to account for income and expenses across the crops and cattle. | |
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Farm wife talking. Please help me understand
