Long Range Planning Rules of Thumb Crop Plan: When listing crop share acres make sure you list ALL the acres and then pick from the share rental arrangements to allocate accordingly Total all acres to see if the tillable land is accounted for Operating Expenses: If possible have 3 years of Schedule F tax information to evaluate farm expenses If family has a lot in Supplies on Schedule F, Detail “Repairs” and “Supplies” under Repairs category of Related Operating Expenses Some tax preparers detail Crop Insurance expense under line 32, others put it in line 20 of the Schedule F. When looking at line 32 (Miscellaneous), consider if crop insurance needs to be deducted from other Dues & Profession type expenses. Fuel usually averages $20/acre for minimum and no till operators Repairs generally average $35 to $50/acre Separate farm insurance and utilities from personal residence insurance & utilities (that would be a family living expense) The farm’s share of personal autos can go in miscellaneous Operating Interest: Calculating Line of Credit interest (operating loan) look at working capital first and see how much is available Then calculate 100% of expenses for crops in 8 months. Subtract working capital and you will get an estimate of the amount of Operating Loan funds needed Cattle Line of Credit: use number of months on feed for total expenses and subtract working capital Other Information: Estimating family living expenses, Have the client go back to the previous year and get their bank statement for the months of March and September. Separate all nondeductible checks and add them
Long Range Planning Rules of Thumb Crop Plan: When listing crop share acres make sure you list ALL the acres and then pick from the share rental arrangements to allocate accordingly Total all acres to see if the tillable land is accounted for Operating Expenses: If possible have 3 years of Schedule F tax information to evaluate farm expenses If family has a lot in Supplies on Schedule F, Detail “Repairs” and “Supplies” under Repairs category of Related Operating Expenses Some tax preparers detail Crop Insurance expense under line 32, others put it in line 20 of the Schedule F. When looking at line 32 (Miscellaneous), consider if crop insurance needs to be deducted from other Dues & Profession type expenses. Fuel usually averages $20/acre for minimum and no till operators Repairs generally average $35 to $50/acre Separate farm insurance and utilities from personal residence insurance & utilities (that would be a family living expense) The farm’s share of personal autos can go in miscellaneous Operating Interest: Calculating Line of Credit interest (operating loan) look at working capital first and see how much is available Then calculate 100% of expenses for crops in 8 months. Subtract working capital and you will get an estimate of the amount of Operating Loan funds needed Cattle Line of Credit: use number of months on feed for total expenses and subtract working capital Other Information: Estimating family living expenses, Have the client go back to the previous year and get their bank statement for the months of March and September. Separate all nondeductible checks and add them