What Schedule F (Form 1040) (2014) Is For

Schedule F (Form 1040), Profit or Loss From Farming, is used to report income and expenses from operating a farm as a sole proprietor or single-member LLC.
You must file Schedule F if you cultivate, operate, or manage a farm for profit, whether you own or lease the land.

This includes income from:

• Sales of crops and livestock
• Government agricultural program payments
• Cooperative distributions
• Crop insurance proceeds
• Custom farming services

References: IRS Instructions for Schedule F (2014); IRS Publication 225 (2014)

When You’d Use Schedule F (Form 1040) for 2014 (Late or Amended Filing)

You would file a 2014 Schedule F today if you:

• Never filed your 2014 return and received an IRS notice proposing a tax assessment
• Need to correct errors on a previously filed 2014 return that affected farm income or expenses

Common Late-Filing Situations

• You owe a balance due and want to set up a payment plan
• You are responding to an IRS substitute return (SFR), where the IRS filed for you without deductions
• You need to correct unreported farm income that appeared on Forms 1099

Refund Deadlines

Refunds for 2014 are generally only available if filed within three years of the original due date (typically April 15, 2015) or within two years of tax payment, whichever is later.
This means the refund statute expired around April 2018 (IRS Topic No. 308).

Even if no refund is due, filing remains important: failure-to-file penalties continue accruing until a return is submitted (IRS Publication 17).

Key Rules Specific to 2014

Mileage and Expense Rules

• Standard mileage rate: 56 ¢ per mile for business use of vehicles (IRS Instructions 2014)
• Farmers could elect to report CCC loan proceeds as income in the year received
• Crop insurance proceeds could be deferred to the next year if crops were damaged in 2014

Depreciation and Section 179

• Use 2014 Form 4562 and the corresponding instructions for correct deduction limits
• Section 179 and depreciation thresholds differ from current-year rules

Government Payments

If you received direct or counter-cyclical payments under the Food, Conservation, and Energy Act of 2008, include them in income only in the year actually received, not when earned.

Prepaid Farm Supplies

Prepaid supplies were deductible when paid only if they did not exceed 50% of other deductible farm expenses, with special rules for livestock feed (IRS Publication 225, 2014).

Step-by-Step (High Level)

1. Gather Your Wage and Income Transcripts

Request 2014 transcripts via:

• Online: IRS Get Transcript
• Phone: 1-800-908-9946
• Mail: Submit Form 4506-T

This verifies all income reported to the IRS (Forms 1099, W-2, and agricultural program payments).

2. Collect Farm Records

Gather documentation for 2014 farm income and expenses:

• Income: sales receipts, cooperative statements, government payments, insurance proceeds
• Expenses: fuel, feed, veterinary bills, supplies, mortgage interest, depreciation records

3. Complete the Correct-Year Forms

Use the actual 2014 Schedule F and Form 1040, not current-year forms. Line numbers and tax laws differ annually.

4. Calculate Self-Employment Tax

Complete 2014 Schedule SE to figure self-employment tax on net farm profit (subject to both income and self-employment taxes).

5. Attach All Schedules and Statements

Include:

• Schedule F
• Schedule SE
• Form 4562 (for depreciation/Section 179)
• Explanatory statements (e.g., crop insurance deferral elections)

6. Mail Your Return

Mail late or amended returns to the address listed in the 2014 Form 1040 instructions for your state.
Include payment if you owe, or Form 9465 to request an installment plan.

7. Keep Copies

Retain copies of all filed forms and documentation for at least three years (six years if underreporting > 25%).

Common Mistakes and How to Avoid Them

1. Using Current-Year Forms Instead of 2014 Versions

Problem: Line numbers, deductions, and tax rates differ.
Fix: Always download 2014 Form 1040, Schedule F, and Schedule SE from IRS.gov/PriorForms.

2. Forgetting to Reconcile Transcripts

Problem: Missing income from IRS records triggers notices.
Fix: Match your records with your 2014 Wage & Income Transcript.

3. Not Reporting All Farm Income

Include patronage dividends, disaster payments, bartering income, custom hire income, and cost-sharing payments (IRS Instructions 2014).

4. Incorrectly Deducting Prepaid Expenses

Problem: Cash-basis farmers deducting 2015-used supplies paid in 2014.
Fix: Deduct only when consumed if prepaid supplies exceed 50% of other expenses.

5. Omitting Self-Employment Tax

Problem: Forgetting Schedule SE and underreporting tax.
Fix: Net farm profit on Schedule F is subject to both income and 15.3% self-employment tax.

6. Mixing Personal and Business Expenses

Problem: Deducting personal portions of expenses (vehicle, insurance, utilities).
Fix: Deduct only business portions; maintain clear records (IRS Publication 225, 2014).

What Happens After You File

Processing Timeline

Expect 8–16 weeks for paper return processing; older returns can take longer.

IRS Notices

The IRS will mail notices showing:

• Account changes
• Assessed taxes, penalties, and interest

If you owe, you’ll receive a balance-due notice with payment options or instructions for an installment agreement.

Penalties and Interest

• Failure-to-file: 5% per month (up to 25%)
• Failure-to-pay: 0.5% per month (up to 25%)
• Interest: Compounded daily (IRS Topic 653)

Appeal Rights

If you disagree with an IRS determination, you may request an appeal or file with the U.S. Tax Court within 90 days (IRS Publication 5).

Substitute for Return (SFR)

If the IRS already filed an SFR, filing your own return with Schedule F typically reduces your liability, as SFRs omit deductions.

FAQs

1. If I file my 2014 return late, can I still get a refund?

Generally no. The refund statute expired around April 2018, three years after the 2015 deadline.
Exception: special circumstances (e.g., financial disability) — see IRS Publication 556.

2. What penalties will I owe for filing 2014 more than ten years late?

• Failure-to-file: 5% per month (up to 25%)
• Failure-to-pay: 0.5% per month (up to 25%)
• Interest: Daily compounding from the original due date

You may request penalty abatement via Form 843 or written explanation for reasonable cause (IRS Publication 594).

3. How do I get transcripts to see what income the IRS has on file for 2014?

Request a Wage and Income Transcript for 2014:

• Online at IRS Get Transcript
• By phone (1-800-908-9946)
• Or by mailing Form 4506-T

4. Do I need to amend my 2014 state return if I file or amend my federal Schedule F?

Most states require amending state returns when you amend your federal return.
Check your state Department of Revenue website for specific deadlines.

5. Can I e-file my 2014 Schedule F now?

No. You must paper-file by mail using the 2014 forms from IRS.gov/PriorForms.

6. What if the IRS already filed a substitute return (SFR) for my 2014 taxes?

Filing your own Schedule F with actual expenses replaces the SFR and usually lowers your tax.
Include a statement: “Taxpayer-filed return to replace Substitute for Return.”

7. Will my 2014 farm loss reduce my tax in other years?

Generally no. Under 2014 law, Net Operating Losses (NOLs) could be carried back 2 years and forward 20 years, but these periods have likely expired (IRS Publication 536).
Still, filing records the loss for audit and reference purposes.

This guide is for informational purposes only and does not constitute tax advice. Always consult a qualified tax professional for guidance on your individual situation.