Farming-Related Breaks

According to the U.S. Department of Agriculture, there were more than 2.08 million farms in the United States in 2007, although the exit rate from farming is between 9 and 10 percent annually. Farming is considered a type of business and is therefore entitled to deductions available to any other business. But the tax law provides special breaks just for farms.

If you operate a farm or farming activity, many of your costs are deductible against your farming income. In addition to any business expense you could claim in a nonfarming business, you may be entitled to special write-offs. Generally, there are no dollar limits on your farming-related deductions.

Some benefits payable to farmers may be tax free. And some expenses paid by farmers may qualify for a tax credit.