Schedule F: Reporting Farm Income and Expenses
Published November 5, 2026
If you run a farm, you report your farm income and expenses on Schedule F (Form 1040). The schedule is filed with your Form 1040. Some filers use a different form, Form 1040-SS, so check its instructions before you start. IRS: Instructions for Schedule F (Form 1040) (2025)
Who uses Schedule F
Schedule F is for the farming business itself. Farming can include raising crops, livestock, or other animals, and related activities. A single-member domestic LLC is generally not a separate entity for federal income tax. The sole member files Schedule F, unless the LLC elects to be taxed as a corporation. IRS: Instructions for Schedule F (2025), General instructions
Cash or accrual method
Choose your accounting method on the schedule. Most small farms use the cash method.
- Cash method: report income in the year you actually or constructively receive it. Deduct expenses in the year you pay them. A prepaid expense that gives a benefit well beyond the year may not be fully deductible in the year paid.
- Accrual method: report income in the year you earn it. Deduct expenses in the year you incur them, even if you pay later. Accrual filers complete Part I, line 9, Part II, and Part III.
IRS: Instructions for Schedule F (2025), Part I
Where the total goes
Your net profit or loss is entered on line 34 of Schedule F. That amount then goes to Schedule 1 (Form 1040), line 6. It also goes to Schedule SE (Form 1040), line 1a, to figure self-employment tax. IRS: Instructions for Schedule F (2025), line 34
Lines that need attention
Several lines ask for more than a dollar amount:
- Line B asks for a principal agricultural activity code. Part IV lists 17 codes. Pick the one that best describes most of your income.
- Line E asks whether you materially participated in the business. If you did not, and you have a loss, you may need Form 8582 to figure any loss you can deduct.
- Pasture income from caring for someone else's livestock goes on Schedule F, line 8. Rent from pastureland on a flat charge is reported on Schedule E.
IRS: Instructions for Schedule F (2025), Lines B, E, and 8
Self-employment tax
Net farm profit can be subject to self-employment tax, which is reported on Schedule SE. Enter the amount on line 34 whether it is a profit or a loss, because the same line feeds Schedule 1 and Schedule SE. You can deduct one-half of self-employment tax on Schedule 1 (Form 1040), line 15. IRS: Instructions for Schedule F (2025)
Illustration only, with made-up numbers. Maria raises hay and sells it. In 2025 she receives $18,000 from hay sales and spends $11,000 on seed, fuel, and repairs, all paid in the year. Her cash-method net profit on Schedule F is $7,000. That $7,000 goes to Schedule 1, line 6, and to Schedule SE, line 1a.
Records to keep
Keep sales receipts, feed and seed bills, fuel and repair records, and bank statements. Keep records of any animals bought or sold, and any loans or government payments you received. Keep a log of business miles or farm equipment use, if you claim them. Store records for as long as you may need them.
Steps to take
- Choose the cash or accrual method, and be consistent from year to year.
- Add up all farm income for the year, including any sales of livestock or crops.
- Add up all farm expenses, using the lines of Schedule F that match each expense.
- Enter the net profit or loss on line 34.
- Carry the amount to Schedule 1, line 6, and to Schedule SE, line 1a.
General information, not advice about your return.
Sources: Sources: IRS, Instructions for Schedule F (Form 1040) (2025) (https://www.irs.gov/instructions/i1040sf); IRS, Publication 225, Farmer's Tax Guide (2025) (https://www.irs.gov/publications/p225) This is general information, not advice about your specific return.
