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bnevwu
New Member

How to I include owner draws from farm income? Is this a pre tax deduction?

 
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JohnW15
Intuit Alumni

How to I include owner draws from farm income? Is this a pre tax deduction?

You don't claim draw anywhere on your return.  You pay your personal expenses just as you would from a salaried W-2 job, there would be no deduction there.  

Think of it this way:  If you have $40,000 in farm income and $15,000 expenses, your net farm income is $25,000.  If you drew out $25,000 during the year to live on, then your net income isn't zero -- It's still $25,000.

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1 Reply
JohnW15
Intuit Alumni

How to I include owner draws from farm income? Is this a pre tax deduction?

You don't claim draw anywhere on your return.  You pay your personal expenses just as you would from a salaried W-2 job, there would be no deduction there.  

Think of it this way:  If you have $40,000 in farm income and $15,000 expenses, your net farm income is $25,000.  If you drew out $25,000 during the year to live on, then your net income isn't zero -- It's still $25,000.

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