Know What Your Farm Can Actually Write Off
A category-by-category reference for what’s deductible on a farm — supplies, livestock, equipment, labor, and the records to back it all up.
Clean records mean cleaner returns and fewer headaches in March. Every category here is something a working farm generates through normal operations — this isn’t a wishlist, it’s a reference to check against what you’re already tracking. Nine categories, plus the one distinction that trips people up most: repairs aren’t improvements, and mixing them changes your depreciation.
1 Farm Operations & Supplies
2 Livestock & Veterinary Costs
3 Fuel, Vehicles & Equipment
4 Labor & Payroll
5 Insurance, Utilities & Overhead
6 Marketing, Sales & Business Expenses
7 Capital Improvements
8 Loans & Interest
9 Government Programs & Miscellaneous
Personal vs. farm reminder: Keep personal spending out of the farm account. When it happens, flag it immediately instead of leaving it buried in your transactions.
Questions we get a lot
72.5 cents per mile for travel from January 1 through June 30, 2026, then 76 cents per mile from July 1 through December 31, 2026. The IRS made a rare mid-year increase in 2026 to reflect rising fuel and vehicle operating costs, so mileage logged before and after July 1 needs to be tracked separately.
Often yes. Bonus depreciation was permanently restored to 100% under the One Big Beautiful Bill Act for qualified property acquired and placed in service after January 19, 2025, with no dollar cap. Section 179 offers an alternative up to $2,560,000 for 2026, phasing out once purchases exceed $4,090,000.
A repair keeps an asset working as it already did — patching a fence, fixing a barn roof — and is deductible immediately. An improvement adds value, extends useful life, or adapts the asset to a new use — a new barn, permanent fencing installation, major equipment overhaul — and gets depreciated over time instead. Mixing the two on your return is one of the most common farm tax errors.
$2,560,000 for 2026, phasing out dollar-for-dollar once total qualifying purchases exceed $4,090,000, and reaching zero at $6,650,000. Bonus depreciation, by contrast, has no dollar limit at all.
Clean categories protect the deductions you’ve already earned.
If you want a second set of eyes on how your farm expenses are categorized, we can go through your books with you.
Disclaimer: This checklist is for informational purposes only and does not constitute legal, tax, or financial advice. While we make every effort to keep the content accurate and up to date, federal and state laws and regulations can change without notice. Decisions based on this information should be made in consultation with a licensed CPA or attorney familiar with your specific situation. Leichter Accounting Services is not liable for any errors or omissions, or for any actions taken based on the contents of this checklist.