-------- Original Message --------
Dear colleagues: Please share with whomever you want.
It is important that Vermont Farmers realize that they must
follow the Federal, AS WELL AS STATE, rules when filing their
income taxes.
It is also important that while they may not be audited by IRS,
they may be audited by the state of Vermont for the same rules or
for just state items.
For instance, should a "farmer" have a loss in 3 of the past 5
years (and is audited) then is the responsibility of the taxpayer
to prove that they are in fact farming as a business and the
losses are justified. This audit may take place by the Federal or
state.
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For instance, the Vt. Dept. of Taxes may dis-allow the schedule
F losses (even tho the Federal was not involved and no
audit was taken on the federal side -- but in a state audit the
state may disallow the losses taken on the federal and
transferred to the state.) Should the state determine that the
farm was a "hobby". In which case, no losses would be allowed.
Remember all the Hobby loss rules as outlined by pub 225.
They need not ALL be met but "facts and circumstances" affect
the situation and thus the rules that must be followed.
Here are some other items of concern.
1. Remember to pay the Sales & Use tax on all
appropriate items. If buying equipment in NH for a Vermont
taxpayer then a sales tax must be paid whether paid via credit
card, check or cash (unless exempt by VT). Vt. Dept. of Taxes
can audit (and has audited) NH businesses to determine if sales
took place to Vt. taxpayer and no sales tax was paid by the Vt.
taxpayer on the VT. tax return or to the dealer. Also some
items used in business must have a sales tax paid on it. For
instance: lumber, and rentals. Other items are exempt from
sales tax for businesses. Check with your accountant and the
Vt. Dept. of Taxes for those items that are exempt.
2. Vt. food sales of individual servings must collect meals
tax - such as 2 slices of pie, 2 donuts, 2 meals, etc. A whole
pie is different and not subject to the meals tax.
[log in to unmask]" type="cite"> 3.
Remember to make all income tax, and other applicable tax
deposits on time
4. Remember that if > $500 income tax is due on the Vt.
tax return and no timely deposits made to bring it below $500 then
a penalty may be due.
5. Vt. Use Value appraisal forms must be filed when the
property in "current use" changes hands. Even if you put the farm
in a "revocable trust", add one name to the deed, or other change
you must file with the "Current use" division of the Vt. Dept. of
taxes in a "timely fashion" as outlined by the rules.
http://www.state.vt.us/tax/pvr.shtml
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6. If you buy items from out of state, whether by store or
internet, and sales tax is due, then you must report that
purchase and the applicable sales tax due. One way to do this
is to use the standard formula as provided by the Vt. Dept. of
Taxes. Big purchases ($1,000 or more need to be calculated
accordingly).
For further information please contact your tax specialist and
Vermont Department of Taxes.
The website for the Vermont Dept. of Taxes may be found at:
http://www.state.vt.us/tax/index.shtml
[log in to unmask]" type="cite">Remember
the
"facts and circumstances" in each case.
Glenn
CC: Bob Parsons
Dennis Kauppila
Mary Peabody
--
Glenn Rogers
UVM Extension Income Tax Consultant
Professor Emeritus - UVM
17 Fairview Dr.
Essex Jct.
Vermont 05452
802-318-5387
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This communication may contain privileged and/or confidential information. It is intended solely for the use of the addressee. If you are not the intended recipient, you are strictly prohibited from disclosing, copying, distributing or using any of this information. If you received this communication in error, please contact the sender immediately and destroy the material in its entirety, whether electronic or hard copy. This communication may contain nonpublic personal information about consumers subject to the restrictions of the Gramm-Leach-Bliley Act. You may not directly or indirectly reuse or redisclose such information for any purpose other than to provide the services for which you are receiving the information.
--
Glenn Rogers
UVM Extension Income Tax Consultant
Professor Emeritus - UVM
17 Fairview Dr.
Essex Jct.
Vermont 05452
802-318-5387
[log in to unmask]
This communication may contain privileged and/or confidential information. It is intended solely for the use of the addressee. If you are not the intended recipient, you are strictly prohibited from disclosing, copying, distributing or using any of this information. If you received this communication in error, please contact the sender immediately and destroy the material in its entirety, whether electronic or hard copy. This communication may contain nonpublic personal information about consumers subject to the restrictions of the Gramm-Leach-Bliley Act. You may not directly or indirectly reuse or redisclose such information for any purpose other than to provide the services for which you are receiving the information.