What SCHEDULE F (Form 1040) (2015) Is For

Schedule F (Form 1040) is used to report profit or loss from farming activities conducted as a sole proprietorship or single-member LLC.

If you cultivated, operated, or managed a farm for profit during 2015—whether you raised livestock, grew crops, operated a dairy, or engaged in other agricultural production—you must file Schedule F with your Form 1040 to report your farm income and expenses (IRS Instructions for Schedule F (Form 1040), 2015).

This schedule calculates your net farm profit or loss, which then flows to your Form 1040 and may also be subject to self-employment tax on Schedule SE.

When You'd Use SCHEDULE F (Form 1040) for 2015 (Late or Amended Filing)

You might need to file or amend Schedule F for 2015 if you:

• Never filed that year's return.
• Received an IRS notice (such as CP2000 or CP2501) indicating unreported farm income.
• Discovered errors on your original return that affected farm income or expenses.

Refund and Filing Deadlines

If you're filing late to claim a refund, the three-year refund statute applies: you generally must file within three years from the original due date (April 18, 2016, for most filers) to claim any refund (IRS Publication 17, 2015).

For 2015 returns, the refund statute likely expired on April 18, 2019. This means:

• Late filers can no longer claim refunds.
• You must still file to avoid failure-to-file penalties if tax is owed.

If you filed on time but need to correct farm income or expenses, use Form 1040X with a corrected Schedule F within three years of filing the original return or two years of paying the tax, whichever is later (IRS Instructions for Form 1040X).

Key Rules Specific to 2015

Mileage and Depreciation

• Business mileage rate: 57.5¢ per mile (IRS Instructions for Schedule F (Form 1040), 2015).
• Bonus depreciation: 50% for qualifying property placed in service in 2015 (IRS Publication 946, 2015).
• Section 179 deduction: Up to $500,000, with a $2 million phase-out threshold.

Government Programs and Payments

The Agricultural Act of 2014 introduced Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) programs that replaced older direct payments. Report these payments on line 4a of Schedule F.

CCC Loans and Reporting

If you received Commodity Credit Corporation (CCC) loans and elected to include loan proceeds as income, special reporting and forfeiture rules applied.

Late Filing Penalties

For returns filed more than 60 days late, the minimum failure-to-file penalty was $135 or 100% of the tax due, whichever was less (IRS Notice 746).

Step-by-Step (High Level)

Step 1: Gather Your Tax Records and Transcripts

Before preparing a late or amended Schedule F:

• Obtain your IRS account transcript and wage and income transcript for 2015 at IRS.gov (Get Transcript Online) or by calling 800-908-9946.
• Compare transcript data (W-2s, 1099s, CCC-1099-G forms) to your own records:
  • Invoices and receipts
  • Bank statements
  • Farm cooperative statements (Form 1099-PATR)
  • Any Forms 1099-MISC for contract farming or custom hire income

Step 2: Complete the Correct-Year Form

Use the official 2015 version of Schedule F (Form 1040) and Instructions, available on IRS.gov under Prior Year Forms and Instructions.
Do not use current-year forms.

• Part I: Report all farm income (livestock sales, crops, co-op distributions, government payments, crop insurance, custom hire income).
• Part II: Report all ordinary and necessary expenses (feed, fertilizer, depreciation, labor, insurance, utilities).
• Part III: Complete only if using the accrual method.
• Compute net profit or loss on line 34 (cash) or line 36 (accrual).

Step 3: Attach Supporting Schedules

Attach these forms where applicable:

• Form 4562 – Depreciation or Section 179 deductions
• Form 4797 – Sales of farm machinery, breeding livestock, or depreciable assets
• Schedule SE – Self-employment tax on farm profit
• Form 8582 – Passive activity loss calculation if you did not materially participate

Step 4: File Your Return or Amendment

• For a first-time filing, send your complete Form 1040 with Schedule F and attachments to the IRS address listed in the 2015 instructions for your state.
• Use certified mail with return receipt for proof.
• For amendments, use Form 1040X and attach your corrected Schedule F. Amended returns for 2015 must be paper-filed.

Step 5: Keep Complete Copies

Retain for at least three years (longer if you claimed a loss or underreported income):

• Copies of filed returns and schedules
• Supporting receipts and bank statements
• IRS transcripts and proof of mailing

Common Mistakes and How to Avoid Them

Mixing Personal and Business Expenses

Only deduct expenses directly related to your farming operation. Exclude personal groceries, home utilities, or livestock for personal use. Maintain documentation for shared expenses (e.g., vehicles, equipment).

Incorrect Accounting Method or Inconsistent Records

Choose cash or accrual accounting and stay consistent. Most small farms use cash, but those with large inventories or syndicates may be required to use accrual. Changing methods without IRS approval can trigger adjustments.

Failing to Report All Income

Report all forms of income, including:

• Barter transactions (non-cash trade)
• Loan forgiveness or cancellations (Form 1099-C)
• Co-op dividends (Form 1099-PATR)
• Government payments (Form 1099-G or CCC-1099-G)

The IRS cross-matches these forms; unreported income triggers CP2000 notices and penalties.

Prepaid Supplies Limitations

For cash-basis taxpayers, prepaid supplies cannot exceed 50% of other deductible expenses. Excess must be deferred unless exceptions apply.

Incorrect Depreciation or Double-Deducting Assets

• Depreciate long-term assets (tractors, barns, fencing) using Form 4562.
• Do not double-claim assets under both Section 179 and regular depreciation.
• Review past depreciation schedules carefully.

Ignoring Self-Employment Tax

Farm profits are subject to 15.3% self-employment tax (Social Security and Medicare). Complete Schedule SE even if you had losses from other income sources.

What Happens After You File

IRS Processing and Notices

• Late original returns: Typically processed in 8–12 weeks.
• Amended returns: May take up to 16 weeks or longer.

Check your status via IRS.gov or by calling 800-829-1040.
Common notices include:

• CP14: Balance due
• CP2000: Unreported income
• Letter 12C: Request for additional documentation

Respond promptly to avoid enforcement action.

Payment Options for Balance Due

If you owe taxes:

• Pay immediately to reduce interest.
• If unable to pay in full, file Form 9465 (Installment Agreement Request) online or by mail.
  • Short-term plans (≤180 days): No setup fee.
  • Long-term plans: Setup fees apply, but payments can be spread out.
    Interest and penalties continue until fully paid.

Penalties and Interest

• Failure-to-file: 5% per month (up to 25%)
• Failure-to-pay: 0.5% per month (up to 25%)
• Minimum penalty (over 60 days late): $135 or 100% of tax owed
  Interest compounds daily until full payment.
  You may qualify for First-Time Penalty Abatement if compliant for the past three years.

Appeals and Dispute Rights

If you disagree with an IRS adjustment:

• Respond within 30–60 days of the notice.
• Include documentation (receipts, invoices, production records).
• You may request a conference with the IRS Office of Appeals or petition the U.S. Tax Court.

For hardship or unresolved cases, contact the Taxpayer Advocate Service (877-777-4778).

FAQs

Can I still get a refund if I never filed my 2015 Schedule F?

No, the refund period expired on April 18, 2019 (three years after the 2016 due date). However, filing remains necessary to stay compliant and prevent IRS enforcement.

What if I filed my 2015 Schedule F on time but made mistakes?

File an amended return using Form 1040X with a corrected Schedule F.
You have three years from filing or two years from payment to amend and claim a refund. Attach documentation for all changes.

Do I need transcripts before filing a late Schedule F?

Yes. Always compare your 2015 IRS Wage & Income Transcript to your own records to ensure you include all income forms and prevent mismatch notices.

Will I owe penalties and interest on a late-filed Schedule F?

Yes, if tax is due.

• Failure-to-file: 5% per month (max 25%)
• Failure-to-pay: 0.5% per month (max 25%)
• Minimum penalty: $135 or tax due, whichever is less
  Interest accrues daily until paid in full.

If your return shows no balance due, no penalties apply.

If I amend my federal Schedule F for 2015, do I also need to amend my state return?

Usually, yes.
Most states base farm income on your federal figures. File an amended state return promptly to avoid additional state penalties or interest.

Can I e-file a late or amended Schedule F for 2015?

No. The e-file window for 2015 closed after the 2016 season.
Mail paper copies of Form 1040 or 1040X (with attachments) to the address listed in the 2015 instructions. Use certified mail with return receipt.

What if my farm had a loss in 2015—do I still have to file?

Yes, if your gross income exceeded the filing threshold or if you owe self-employment tax on other income.
Even if not required, filing can help record losses and preserve Social Security earnings credits.