Both the Internal Revenue Service and Minnesota’s Department of Revenue agree. Taxpayers who farm or fish for a living deserve a break this time around!
Most Individual farmers and commercial fishermen make a single estimated tax payment on Jan. 15 each year. If they don’t pay by March 1, they normally can be hit with penalties.
But, the IRS changed some rules for 2018 returns and apparently sowed some confusion into the mix for many of those taxpayers. Specifically, the IRS says it “anticipate(s) that farmers and fishermen may have difficulty accurately determining and paying their tax liability for the 2018 taxable year by March 1, 2019.”
So, now, if they missed that estimated tax payment, it’s OK. Farmers and fishers won’t face any federal penalties if they pay their full tax load by the normal April 15 deadline. The waiver does come with another form, though. Taxpayers invoking it must add IRS Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen, to their 2018 tax returns. There’s a box to be checked for a waiver.
We should note that, to qualify as a commercial farmer or fisherman, at least two-thirds of his/her gross income must come from farming or fishing. For more information, see IRS Notice 2019-17 at https://www.irs.gov/pub/irs-drop/n-19-17.pdf
Following the feds, Minnesota Revenue also is willing to waive penalties. But the state tax agency is telling those taxpayers NOT to file the normal state forms for underpayment (Forms M15 or EST). Instead, they can just file their normal Minnesota M1 or M2 returns and attach the federal form – plus any tax payment, of course.
To navigate the new tax break, feel free to contact Eric and EricJohn Ltd. who is an Enrolled Agent accredited by the IRS.