Farm & Ranch Taxes: The importance Of Record Keeping

 

 

While most people must file taxes by April 16, 2018, farm and ranch taxes must be filed by March 1, 2018. Due to the filing deadline many producers are beginning the process of gathering their important paperwork. In general, the law does not require any specific kinds of records (there are a few exceptions though).

 

 

A producer can choose any kind of record keeping system they wish to use for their business (ex. Quicken, QuickBooks, Easy Farm, Red Wing, paper ledger, etc.). The record keeping system should include a summary of all business transactions. It is imperative producers also keep supporting documents such as purchases, sales, payroll, invoices and other transactions taking place in the business. The reason why it is so important to keep these documents is that they support the entries listed in journals, ledgers, and tax returns. It is important producers keep these records for three years from when the tax return was filed (however, some records may need to be kept longer).