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IRS waives estimated tax penalty for Farmers that file returns and pay tax by April 15

The Internal Revenue Service announced that farmers (and fishermen) who usually file their Federal tax returns by March 1, 2019, may file and pay their tax up to April 15th without the need to pay a late filing penalty.

The most significant issue inhibiting timely farm tax return filing was a lack of guidance on many critical issues that directly affect how farm tax returns are prepared.  Many software programs until recently did not contain all of the required forms to file a farm tax return correctly.  Farm tax returns are now due April 15, 2019.  To waive the estimated tax penalty, all tax must be paid by April 15, 2019.

A copy of the IRS news release is posted below.


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IRS waives estimated tax penalty for farmers, fishermen who file returns and pay tax by April 15

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WASHINGTON — The Internal Revenue Service will waive the estimated tax penalty for any qualifying farmer or fisherman who files his or her 2018 federal income tax return and pays any tax due by Monday, April 15, 2019. The deadline is Wednesday, April 17, 2019, for taxpayers residing in Maine or Massachusetts.

The IRS is providing this relief because, due to certain rule changes, many farmers and fishermen may have difficulty accurately determining their tax liability by the March 1 deadline that usually applies to them. For tax year 2018, an individual who received at least two-thirds of his or her total gross income from farming or fishing during either 2017 or 2018 qualifies as a farmer or fisherman.

To be eligible for the waiver, qualifying taxpayers must attach Form 2210-F, available on IRS.gov, to their 2018 income tax return. This form can be submitted either electronically or on paper. The taxpayer’s name and identifying number, usually a Social Security number, must be entered at the top of the form. The waiver box—Part I, Box A—should be checked. The rest of the form should be left blank.

Further details can be found in Notice 2019-17, posted today on IRS.gov.

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Definition of a farmer or fisherman for tax purposes:

Under normal circumstances, a qualifying farmer for tax year 2018, includes individuals that received at least two-thirds of their total gross income from farming or fishing during either 2017 or 2018.  Qualifying farmers and fishermen are not required to make quarterly estimated payments but must file their tax return by March 1.  Qualifying farmers and fisherman may pay an estimated tax payment by January 15 and then file by April 15 without any estimated tax penalty.

This estimated tax waiver for farm returns will allow time for IRS to issue guidance regarding the new Section 199A calculations, including the cooperative sales transition rule.

Check with your tax professional to discuss your options.  

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