Schedule F (Form 1040) 2023: Profit or Loss From Farming

Schedule F (Form 1040) is the IRS form sole proprietors use to report farm income and farming expenses. Farmers attach it to Form 1040 using either the cash method or the accrual method. Publication 225, the Farmer's Tax Guide, provides complete guidance for this form.

Late Filers

Farmers who missed the April 15, 2024, deadline can still file the 2023 Schedule F to stop the failure-to-file penalty from accruing each month.

Multiple Income Sources

Schedule F allows farmers to report livestock sales, cooperative distributions, agricultural program payments, crop insurance proceeds, and custom hire income on a single farming tax return.

Itemizing Deductions

Farmers whose allowable expenses — including feed, fertilizers, and depreciation — exceed gross farm income can use Schedule F to report a net operating loss.

Claiming 2023 Credits

Eligible farmers may claim Fuel Tax Credits on their 2023 federal tax return, reducing overall tax liability by attaching required supporting forms to Schedule F.

IRS Compliance

Filing Schedule F establishes a compliance record with the IRS, which the agency may require before approving a payment arrangement or resolving any outstanding balance.

Citizens Abroad / Military

U.S. citizens farming abroad or military personnel with agricultural income may still be required to attach Schedule F to Form 1040 or Form 1040-NR.

Follow the steps below to accurately complete your 2023 Schedule F; steps 3, 5, and 6 contain figures and rules specific to this tax year.

1. Gather Your Documents Before Starting

Collect all 2023 farming income records before starting, including Form 1099-PATR, crop insurance statements, agricultural program payment notices, and expense receipts. Use IRS Get Transcript Online if original documents are missing.

2. Choose the Correct Accounting Method

At the top of Schedule F, select either the cash method or accrual method in Box C. Cash method farmers complete Parts I and II; accrual farmers complete Parts II and III, plus line 9 of Part I. Section 448(a)(3) restricts C corporations from the cash method; confirm eligibility under Publication 225 and Pub. 538.

3. Report All Farming Income on the Correct Lines

Report purchased livestock on line 1a, raised livestock and produce on line 2, Form 1099-PATR distributions on line 3b, agricultural program payments on line 4b, Commodity Credit Corporation loans on lines 5a and 5c, and crop insurance proceeds on line 6b. Farmers may defer 2023 crop insurance proceeds to 2024 by checking line 6c per Publication 225.

4. Calculate Adjusted Gross Income (AGI)

Add income on lines 1c, 2, 3b, 4b, 5a, 5c, 6b, 6d, 7, and 8 and enter the total on line 9 as gross income. Subtract expenses on line 33 to reach net farm profit or loss on line 34, which flows into AGI and determines Schedule SE self-employment tax.

5. Choose Your Deductions and Apply Expense Limits

Complete Part II to deduct car and truck expenses via Form 4562, chemicals, feed, fertilizers, insurance, labor, repairs, seeds and plants, state and local taxes, utilities, and veterinary costs. The section 179 deduction limit is $1,160,000, and bonus depreciation is 80% for qualifying property placed in service in 2023; Form 8990 Business interest expense limitation may also apply.

6. Claim the 2023 Fuel Tax Credits [2023 Only]

Farmers who used fuel for off-highway farming activities may claim fuel tax credits by filing Form 4136 and entering the credit on Schedule F line 8. [2023 Only] Verify the per-gallon rate on the IRS website before filing.

Missing Schedule F (Form 1040) or Tax Records for 2023?

Late filers often lack original 2023 farming income records, but IRS and Social Security Administration transcripts can help reconstruct the data needed to file an accurate return. Always use official records rather than estimated figures when completing Schedule F.

IRS Wage & Income Transcript

This free IRS transcript lists all income reported by employers, cooperatives, and financial institutions for 2023, including Form 1099-PATR amounts, and is available through IRS Get Transcript Online at IRS.gov.

IRS Account Transcript

The IRS account transcript shows estimated tax payments, penalties assessed, and adjustments to the 2023 tax account, making it useful for reconciling any discrepancies in the outstanding farm income balance.

Social Security Administration

The Social Security Administration can provide wage records for farm laborers or household employees whose W-2s are missing, particularly if Social Security and Medicare taxes were withheld.

Contact Prior Employers

If a Form 1099-PATR, W-2, or other income document is missing, contact the issuing cooperative or employer to request a duplicate, or use an IRS wage and income transcript.

Do not estimate any income figures on Schedule F; use IRS transcripts to match records and reduce the likelihood of follow-up notices from the IRS.

These are the most frequent errors causing IRS delays, rejected returns, or missed credits on 2023 Schedule F returns.

• Using the wrong tax year form — Submitting any prior-year Schedule F results in automatic rejection; always use the official 2023 form from the IRS website or the Prior Year Forms webpage.
  
  
• Missing Schedule SE / self-employment tax — Failing to attach Schedule SE when Schedule F shows a net profit causes the IRS to separately assess self-employment taxes on net earnings.
  
  
• Wrong accounting method selected — Checking the wrong box in Box C misrepresents income; cash method farmers use Parts I and II, while accrual farmers must also complete Part III.
  
  
• Applying Preproductive period expenses incorrectly — Farmers capitalizing costs under section 263A may not deduct preproductive period expenses for citrus plants and other specified crops in the current year.
  
  
• Treating cooperative distributions as fully nontaxable — Only the nontaxable portion of Form 1099-PATR payments is excluded; the taxable amount must be reported on line 3b as part of gross farm income.
  
  
• Assuming a refund is still available — Refund claims for 2023 must be filed by April 15, 2027; overpaid taxes not claimed by that date are permanently forfeited and cannot be recovered.
  
  
• Missing or incorrect Social Security numbers — An incorrect SSN or EIN at the top of Schedule F causes outright rejection or misposting of payments by the Internal Revenue Service.
  
  
• Unsigned return — A 2023 Form 1040 without the required taxpayer signature is invalid and will not be processed by the IRS until properly signed.
  
  
• Missing attachments — Omitting Form 4562, Form 8582, or Form 6198 causes the IRS to disallow claimed deductions and significantly delay processing of the return.
  

What is Schedule F (Form 1040) (2023) used for?

Schedule F (Form 1040) is the IRS form sole proprietors use to report profit or loss from farming activities for the tax year 2023. Net farm profit flows into taxable income on Form 1040 and triggers Schedule SE, which calculates the self-employment tax owed on net earnings from farming.

Can I still file a 2023 Schedule F tax return?

Yes, farmers can still file the 2023 Schedule F after the April 15, 2024, deadline. Filing now stops the failure-to-file penalty from growing. If a refund is owed, the window stays open until April 15, 2027; consult a tax professional to confirm eligibility under the applicable statute of limitations.

Who is required to file Schedule F for 2023?

Sole proprietors with farm income from crop production, animal production, or forestry and logging must attach Schedule F to Form 1040 for 2023. Farmers who received agricultural program payments, Form 1099-PATR cooperative distributions, or crop insurance proceeds must report all those amounts on this form.

What is the difference between the cash method and the accrual method on Schedule F?

The cash method reports income when received and expenses when paid, covering Parts I and II. The accrual method requires reporting when earned or incurred, adding Part III. Section 447 and Section 448(a)(3) restrict certain entities; confirm eligibility in Publication 225 and Pub. 538.

What farming expenses can I deduct on Schedule F for 2023?

Deductible 2023 farming expenses include car and truck expenses, chemicals, conservation expenses, custom hire, feed, fertilizers, freight and trucking, gasoline and fuel, insurance, labor hired, repairs, seeds and plants, state and local taxes, utilities, and veterinary costs, as detailed in Publication 225, Pub. 463, and Pub. 946.

How do I report a net operating loss on my 2023 Schedule F?

When total expenses on line 33 exceed gross income on line 9, line 34 shows a net operating loss. Carry it to Schedule 1 of Form 1040, then review Form 172 and Publication 225 to determine if the farming loss may be carried back or carried forward.

Do I need to file Schedule SE with my 2023 Schedule F?

Yes. Net farm profit of $400 or more on Schedule F line 34 requires attaching Schedule SE to calculate self-employment tax covering Social Security and Medicare. Accurate reporting of net earnings also affects future Social Security Administration benefit calculations, so every figure on Schedule F must be verified.

What is Form 4835, and how does it differ from Schedule F?

Form 4835 reports farm rental income for landowners who did not materially participate in operations, while Schedule F is for farmers who actively operated the farm. Landowners receiving crop-share rents without material participation should use Form 4835 rather than Schedule F to report that farming income.