Farm Income Expense - Taxes

Line 29 (Schedule F) You can deduct the following taxes on this line.

• Real estate and personal property taxes on farm business assets.

• Social security and Medicare taxes you paid to match what you are required to withhold from farm employees' wages.

• Federal unemployment tax.

• Federal highway use tax.

• Contributions to state unemployment insurance fund or disability benefit fund if they're considered taxes under state law

Don't deduct the following taxes on this line.

• Federal income taxes, including your self-employment tax. However, you can deduct one-half of self-employment tax on Schedule 1 (Form 1040), line 15.

• Estate and gift taxes.

• Taxes assessed for improvements, such as paving and sewers.

• Taxes on your home or personal-use property.

• State and local sales taxes on property purchased for use in your farming business. Instead, treat these taxes as part of the cost of the property.

• Other taxes not related to your farming business.