Taxpayers with income from farming or fishing face a March 1 deadline for filing their income taxes. But the IRS reminds them they can avoid making any estimated tax payments by filing and paying their entire tax due on or before the deadline.
The rule generally applies if farming or fishing income amounted to at least two-thirds of the taxpayer’s total gross income in either the current or the preceding tax year.
To avoid an estimated tax penalty, taxpayers who don’t file by March 1 should have made an estimated tax payment no later than Jan. 15.
Refer to Publication 505, Tax Withholding and Estimated Tax for more information.
What do farmers and fishers need to file?
Taxpayers in the farming business report income and expenses on Schedule F (Form 1040), Profit or Loss From Farming. They also use Schedule SE (Form 1040), Self-Employment Tax to figure self-employment tax if their net earnings from farming are $400 or more. See Topic No. 554, Publication 225, Farmer’s Tax Guide and Agriculture Tax Center for more information.
Taxpayers in the fishing business report income and expenses on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). They also use Schedule SE (Form 1040) to figure self-employment tax if their net earnings from fishing are $400 or more. For general information about the rules applying to individual taxpayers – including commercial fishermen who file Schedule C – refer to Publication 334, Tax Guide for Small Business.
Save time with IRS Direct Pay
IRS Direct Pay is a free online service. It allows people to make same-day payments or schedule them up to 365 days in advance from a checking or savings account.
There are no IRS fees and no pre-registration.
The service is available seven days a week, and users get immediate confirmation after the submit a payment. They can also opt-in to get email notifications.
Taxpayers should note, however, that IRS Direct Pay cannot be used to pay the federal highway use tax, payroll taxes or other business taxes. Taxpayers seeking to pay those business taxes electronically can enroll in the Electronic Federal Tax Payment System (EFTPS), which is also a free service.
For more information about payment options, check out IRS.gov/payments.
Source: IR-2021-42
Rushmore Group LLC