Springtime: Avoiding Tax Time Turmoil
It looks like spring has arrived. The weather seems to be improving. Flowers and trees are beginning to bloom. Everything seems to be coming out of the winter doldrums! Everybody seems to be extremely optimistic this time of year.
The only cloud on the horizon, particularly for farmers, is the prospect of having to prepare their Income Tax Return. This seems to be a perennial problem for everyone. However, it seems to be particularly tough for farmers. The reason for farmers being in this unique position is that they do not get a statement from an employer indicating how much income they have earned. For farmers, their farm is the business. It is their responsibility, as farm business managers, to determine the amount of income on which they must pay taxes. Determining this taxable income requires the farmer to keep up with all income and expenses for the farm business. It is at this point that farmers typically have problems. They do not enjoy keeping up with all this information. The springtime income tax preparation turmoil is the result!
Farmers can eliminate these tax preparation problems if they improve their ability to manage this income and expense information. This improvement could be nothing more than starting to use two partitioned file folders for storing their receipts. One folder should be used for income receipts. The other should be used for expenses. If these folders each have 12 pockets, the receipts can be filed by month.
This is an easy way to get started in the information management revolution. It should prove to be very helpful at tax time. More importantly, it will provide a convenient place to store all receipts and prevent their loss.
After a farmer has gained experience and confidence in using this filing system, they may want to improve their information management even more. This would be the perfect time to move to a book for recording the transactions as they happen during the year. The Kentucky Farm Record Book would be a great way to start. It was designed specifically for a farmer in this situation. If they are interested in this record book, they should contact their County Extension Agent. The books are available for sale in each County Extension office across the state.
This record book should provide farmers with a good entry into the information management revolution.
For More Information
For additional information, please contact Richard Trimble.