Farmer Tax Deadline
2/16/22 – The Farmer tax deadline is fast approaching. Being an accounting firm in Iowa and Minnesota means that we have a substantial amount of farming returns. Let’s talk about estimated tax for farmers and why this is such a big deadline in our firm.
If you are a calendar year (December 31st) taxpayer and have at least two-thirds of your gross income for 2021 from farming, you have only one payment due date for your estimated tax. That due date was January 18, 2022. The due dates for the first three payment periods in estimated tax do not apply to you. If you have not made that estimated tax payment yet, don’t worry! You will not get a penalty if you file your 2021 Form 1040 by March 1, 2022 and pay all the tax you owe at that time. You will also not get a penalty if the tax shown on your 2021 return, minus your 2021 withholding, is less than $1,000.
You can figure the penalty for failure to pay estimated taxes, which includes failing to pay enough estimated taxes, for 2021, on the difference between the amount of your 2021 withholding plus estimated tax you paid by January 18, 2022, AND the smaller of:
- 66 2/3% of your 2021 tax, or
- 100% of the tax shown on your 2020 return.
As you can see, it is not worth getting penalties. If you have any questions, please reach out to one of our offices so we can help!