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Southeast MN | Not sure if this is the right forum:
A little background info before my question. I have been using the cash method for figuring farm income taxes and think it's been ok up until this year. I have no on farm storage and have always contracted ahead most of the crop for fall delivery and taken spot price on any extra bushels. No cattle in this operation. This year the late harvest didn't have all the crop harvested before the terminal closed so I'm stuck with bushels that probably won't get converted to cash before year end. If I stick with the cash method and do nothing, I will show an unusual loss for 09 and extra income in 2010 without the expenses tied to it. I won't pay any tax this year and next year pay too much plus the extra social security taxes in 2010.
Ideas/questions so far:
1. Will changing to the accrual method solve my tax/income problem and is it more complicated? In the past, I've done my own taxes and seems straight forward with the cash method.
2. How about income averaging?
3. On the cash method, would it violate IRS rules to claim 09 expenses (only once but in 2010) instead of 09?
Thanks
Edited by Dave Frisch 12/16/2009 20:17
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Need some ideas for income tax planning.
