Agricultural industry taxpayers, farmers and fishermen, who electronically file Form 1040 returns with Form 4136, Credit for Federal Tax Paid on Fuels, must wait until March 3 to e-file the newly-revised Form 4136.

Normally, 1040 filers who are farmers or fishermen are not required to make an estimated tax payment if they file their return and pay all taxes due by March 1.   But this year, because March 1 falls on a Saturday, the date extends to Monday, March 3.  For eligible farmers and fishermen who attach Form 4136 to their Form 1040, the return will be considered timely filed with all tax paid if the return is e-filed and accepted on or before March 10 and all tax due is paid on or before March 10.

.

To educate taxpayers about their filing obligations, this fact sheet, the thirteenth in a series, highlights some income sources and deductible business expenses of farmers. Incorrect reporting of farm income and expenses accounts for part of the estimated $345 billion per year in unpaid taxes, according to IRS estimates.

Income Sources

Farmers may receive income from many sources, but the most common source is the sale of livestock, produce, grains, and other products raised or bought for resale. The entire amount a farmer receives, including money and the fair market value of any property or services, is reported on IRS Schedule F, Profit or Loss From Farming.

Colorado residents in the declared counties affected by the severe winter storms of Dec. 18-22 and 28-31, 2006 may be eligible for various forms of tax relief that could lessen some losses, according to federal and state recovery officials.

Special rules apply to Presidentially declared disaster or emergency areas and may be available to taxpayers living in one of the declared counties who have sustained losses as a direct result of the December 2006 storms. If you have a loss attributable to the 2006 storms that occurred in an area designated by FEMA for emergency assistance, you may elect to deduct that loss on your tax return for the immediately preceding taxable year, 2005. For purposes of the election, a disaster includes an event declared a major disaster or an emergency. You normally have until April 17, 2007, the due date of your tax return for the tax year of the disaster without extensions, to make this election. If you have already filed your 2005 return, you may claim the loss by filing an amended return, Form 1040X, for 2005.

A key legislation which purpose was primarily to encourage domestic production of ethanol, discourage dependence on foreign energy and circumvent other countries from competing with United States past last December.

This is a boon to U.S. farmers, producers and others with a stake in the ethanol industry, granting them three more years of less competition from foreign imports of this source of renewable fuel.

The IRS has released the 2006 farmer