Small farm (Schedule F)
A family grain-and-cattle farm reporting on Schedule F: raised-product sales, a government program payment, ordinary farm expenses, and self-employment tax on the profit.
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Taxpayer facts
Who this is and what their year looked like.
Wesley and Marta are married and run a small grain-and-cattle operation near Brookings, South Dakota. They file jointly and both materially participate in the farm.
Their income is from selling raised crops and livestock plus a federal agricultural program payment. They keep good books of their farm expenses and made estimated payments.
Source documents
The 2 documents you will prepare the return from: 1099-G (Certain Government Payments), Farm records: Kowalczyk Family Farm.
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Objectives
What a correct return should capture.
- Report farm income on Schedule F: the sales of raised grain and livestock plus the government agricultural program payment (1099-G box 7).
- Deduct the ordinary farm expenses (feed, seed, fuel, repairs, depreciation, insurance, taxes, interest, supplies, vet, utilities), including this year's depreciation on the tractor.
- Arrive at net farm profit (Schedule F, line 34).
- Farm profit is self-employment income → Schedule SE; compute SE tax and take the one-half deduction.
- Apply the MFJ standard deduction ($31,500 for 2025).
- Take the QBI deduction on Form 8995: the smaller of 20% of the farm's qualified business income or 20% of taxable income before QBI.
- Know that farm-specific rules exist (income averaging on Schedule J; special estimated-tax deadlines for farmers) even though this return uses the standard approach.
- Note that South Dakota has no state income tax.
Check your work
The answer key and the complete return, the way a real client receives it: the 1040 and its schedules, the workpapers behind every number, and the signature forms.
Stuck? Work through it with Yehuda
A one-on-one, 30-minute tutoring session on this return with Yehuda Tenenbaum, EA. Bring the spot where you got stuck and we will work through it together: how the forms connect, why a figure lands where it does, and how to check your work. $250. This is education on the practice return, not advice on your own taxes.