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BY JOE KOENEN
The end of 2022 is upon us and so today I want to discuss income tax issues. I furthermore want to tell you I am retiring at the end of 2022 after serving 43 years in this job. I appreciate all the folks I have been in contact with over the years and hope to run into some of you again in the future.
1099NEC or 1099MISC are two of three income tax forms at least farmers should be aware of now. There is an additional form 1096 that has to be sent to the IRS no matter how many of these two forms you complete. All are due to the payee and copy to the IRS by January 31, 2023. The 1099NEC is for someone who is not your employee you have paid over $600 in a year. The employee threshold to withhold is $150 so do not confuse them. These would include custom planting, combining, haying, dozer work and others. The 1099MISC is now used for cash rent paid, health care costs and veterinary work. These are all related to your work or business. Feed such as hay bought, supplies and other normal expenses are not included with this. Attorneys are unique in that if you pay them in your course of business (estate or succession plan) then they receive a 1099 even if they are incorporated. Vet work is for the vet service themselves and not medicine if the bill is separated.
Farmer’s Tax Guides are another excellent reference for 1099 instructions and an overall income tax reference. They are available at your county extension office at no cost so stop by and pick one up. It also discusses weather related sales which is a big deal in 2022 with drought, etc. Many counties in Missouri are eligible. You can also download the Farmer’s Tax Guides online at www.irs.gov. If your Internet is slow, it will take a while.
Do not forget Missouri Extension educators
can answer some tax questions or contact your preparer. You should be doing income tax estimates this time of year too. A program on farm leases, (a 10-week online seminar is coming Tuesday evenings from 7 to 7:30 pm for $100 beginning January 10 and going till March 14). If you have a general question related to Ag Business (budgets, finances, labor, etc.) please feel free to contact the Livingston County Extension Office at 646-0811 and they can direct you to a specialist.
Joe Koenen is a CES in Agricultural Business for the University of Missouri Extension.
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