What SCHEDULE F (Form 1040) (2023) Is For

Schedule F (Form 1040), Profit or Loss From Farming, is used to report income and expenses from farming operations conducted as a sole proprietor or single-member LLC (IRS Instructions for Schedule F, 2023). Farmers who operate as sole proprietors must file Schedule F with their Form 1040, 1040-SR, 1040-SS, 1040-NR, 1041 (estates and trusts), or 1065 (partnerships) to report farm income—including sales of crops, livestock, government agricultural payments, and cooperative distributions—and to deduct ordinary and necessary farm expenses.

The net profit or loss flows to your Form 1040 and, if profitable, is subject to self-employment tax via Schedule SE.

When You'd Use SCHEDULE F (Form 1040) for 2023 (Late or Amended Filing)

You file Schedule F for 2023 as a late or amended return when you discover errors, omissions, or changes after the original April 15, 2024 deadline (or October 15, 2024 with an extension).

Common late-filing scenarios include:

• Receiving an IRS notice (CP2000, balance due notice) identifying unreported farm income or disallowed deductions
• Finding additional Forms 1099-G or 1099-PATR after filing
• Failing to file entirely
• Correcting your accounting method (cash vs. accrual) or material participation status to properly claim a farming loss

For refund claims, you generally must file within three years of the original filing date or two years from paying the tax, whichever is later (IRS Topic No. 308).

If you owe tax, the IRS charges:

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

Farmers with at least two-thirds of their gross income from farming can avoid estimated tax penalties by filing and paying by March 1, 2024 (IRS Instructions for Schedule F, 2023).

Key Rules or Details for 2023

• Mileage rate: 65.5 cents per mile for business use of vehicles
• Meal deductions: Temporary 100% deduction expired; standard 50% limit reinstated
• Small business exemption: Farmers with ≤ $29 million average gross receipts are exempt from Section 263A capitalization rules
• NOL carrybacks: Farming NOLs can still be carried back 2 years unless the farmer elects to forgo
• Drought-related livestock sales: May defer income if the area qualified for federal disaster relief
• Passive activity losses: Non-material participants must file Form 8582 and can only offset passive income

(IRS Instructions for Schedule F, 2023; Rev. Proc. 2021-45; IRS Publication 925)

Step-by-Step (High Level)

Step 1: Gather Wage and Income Transcripts

Order your 2023 IRS Account Transcript and Wage and Income Transcript at IRS.gov/Individuals/Get-Transcript or by calling 800-908-9946 to verify all farm income (Forms 1099-G, 1099-PATR, 1099-MISC) and withholdings.
This helps prevent mismatches that trigger IRS notices.

Step 2: Complete the 2023 Schedule F

Download the 2023 Schedule F from IRS.gov.
Enter your:

• Principal agricultural activity code (Line B)
• Accounting method (cash or accrual, Line C)

Report:

• All farm income in Part I
• All deductible expenses in Part II
  Compute net profit or loss on Line 34.
  ⚠️ Do not use 2024 or 2025 forms for a 2023 return.

Step 3: Attach Required Schedules and Forms

Attach:

• Form 4562 (if claiming depreciation or Section 179)
• Form 8582 (if reporting passive activity losses)
• Form 1045 (for NOL carrybacks)
• Schedule SE (for self-employment tax)

Step 4: File Form 1040 with Schedule F Attached

For late original returns, file a complete 2023 Form 1040 with Schedule F attached.
For amended returns, file Form 1040-X with a corrected Schedule F and explanation in Part III.
Form 1040-X for 2023 can be e-filed if correcting the current or two prior years.

Step 5: Mail or E-File and Keep Proof

If mailing, send to the address listed for your state in IRS instructions and use certified mail.
If e-filing, save your electronic acknowledgment.
Keep copies of all documents for at least three years.

Common Mistakes and How to Avoid Them

Using the Wrong Accounting Method

Cash-method farmers who prepay more than 50% of next year’s farm supplies can only deduct the excess when used.
Always check the “Cash” or “Accrual” box and follow the matching income-expense rules.

Failing to Report All Forms 1099

Missing any Form 1099 (e.g., 1099-G, 1099-PATR, 1099-A, 1099-MISC) leads to an IRS mismatch notice.
Cross-check all entries against your Wage and Income Transcript.

Incorrectly Claiming Material Participation

If you check “No” on Line E (not materially participating), any loss is passive and limited by Form 8582.
Review the seven material participation tests in IRS Publication 925.
Retired or disabled farmers may qualify under special rules.

Deducting Personal or Living Expenses

Personal expenses—home repairs, family food, personal vehicle use—are not deductible.
Keep mileage logs and allocate vehicle expenses by business-use percentage.

Missing the Refund Statute Deadline

Refund claims for 2023 must be filed by April 15, 2027.
Late refund claims after this date are permanently forfeited.

Not Capitalizing Costs When Required

Large operations (>$29 million receipts) must capitalize indirect and preproductive-period costs under Section 263A.
Report these on Line 32f as negative with notation “263A.”

What Happens After You File

Processing Timeframes

• Paper-filed originals: 6–8 weeks
• Amended returns (1040-X): Up to 16 weeks
• E-filed refunds: Usually within 21 days

Monitor your return via:

• IRS.gov/Account
• Where’s My Amended Return?

IRS Notices and Correspondence

You may receive IRS letters confirming processing, requesting more info, or proposing changes.
Respond within the stated deadlines (30–90 days) to preserve your appeal rights.

Payment Options if You Owe

• Pay online at IRS.gov/Payments
• Request an installment agreement via Form 9465 or the Online Payment Agreement Tool
• For financial hardship, consider Offer in Compromise or Currently Not Collectible status

Penalty Relief Possibilities

You may qualify for:

• First-Time Penalty Abatement (FTA) — if you have a clean compliance history
• Reasonable Cause Relief — for illness, disaster, or circumstances beyond control

Appealing IRS Decisions

If you disagree with an adjustment or penalty:

• Follow appeal instructions in your IRS notice
• File within the notice timeframe (typically 30 days)
• You may request a hearing with the IRS Independent Office of Appeals (IRS Publication 5)

FAQs

Is it too late to file Schedule F for 2023 if I never filed?

No. You can still file, and you should do so promptly to stop penalties.
However, refund claims expire after April 15, 2027 (IRS Topic No. 308).

What penalties and interest apply to late-filed Schedule F for 2023?

If you owe tax:

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

You may request First-Time Penalty Abatement by phone or written request.

How do I get transcripts to verify my 2023 farm income before filing late?

Order Tax Account and Wage and Income Transcripts free from IRS.gov or call 800-908-9946.
They show all Forms W-2, 1099-G, 1099-PATR, and 1099-MISC reported to the IRS.

Can I still claim my 2023 farming refund if I never filed and the deadline passed?

Yes, if filed by April 15, 2027. After that date, refunds are permanently forfeited.
There’s no penalty for filing late if you’re due a refund.

Do I need to amend my state return if I file an amended Schedule F?

Usually yes. State returns are based on federal AGI.
File a state amended return following your state’s specific procedures and deadlines.

What if I discover I should have filed Schedule F instead of Schedule C for my 2023 farm?

File Form 1040-X and attach a corrected Schedule F.
Explain the correction in Part III of Form 1040-X.
This may affect self-employment tax and NOL carryback eligibility.

If I didn’t materially participate in my 2023 farm, can I still deduct the loss?

Only against passive income. Use Form 8582 to compute allowable losses; disallowed losses carry forward indefinitely.
Document your hours and role carefully to establish material participation if applicable.