How Does the March 1st Tax Filing Deadline Work for Ag Producers?

Agriculture
The March 1st deadline for farm tax returns allows qualifying ag producers to file their tax returns and pay any tax due without having to make estimated tax payments.
To take advantage of this deadline, you must meet these specific requirements and conditions:
Definition of a Qualified Ag Producer
- An individual whose gross income from farming is at least two-thirds of their total gross income for either the current tax year or the preceding tax year.
Special Rules for Qualified Ag Producers
- If they are filing their tax return and paying the full tax due by March 1st, they are not required to make any estimated tax payments. If they do not file and pay the tax due by March 1st, they will be subject to penalties.
- They are subject to special estimated tax rules. Ag producers are required to make only one estimated tax payment by January 15th of the following year if they do not file their return by March 1st instead of the traditional four estimated payments like other taxpayers.
- By making the required annual payment by January 15th, they have until April 15th to file their tax return. The ag producer then has the option to extend their tax return at the April 15th deadline. This can be a wise strategy if you often wait for information such as year-end brokerage investment reports or K-1s from other investments with which you are involved.
- The extension extends the time to file but not the payment due so an extension payment may be necessary.
Amount of Annual January 15th Estimated Tax Payment
- The required annual payment for a qualified ag producer is the lesser of:
- Two-thirds (66â…”%) of the tax shown on the current year’s return, or
- 100% of the tax shown on the preceding year’s return.
By meeting these requirements and conditions, ag producers can take advantage of the March 1st deadline to file their tax returns and pay any tax due or make the one estimated tax payment on January 15th.
Please contact one of our Agricultural Tax Experts if you have any questions regarding how we can help with your farming or ranch operation.