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jackm
New Member

Where do I enter contract labor for my farm

 
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13 Replies

Where do I enter contract labor for my farm

Be careful with the answers received. Contract Labor is not Custom Hire (Machine Work), it is Labor Hired

Where do I enter contract labor for my farm

To clarify, IRS Schedule F Line 22 is named Labor Hired, the Turbotax input field is named Gross Wages
PeterM
New Member

Where do I enter contract labor for my farm

Log into your return, then...

  1. Click the Business tab
  2. Click the Business & Expenses tab
  3. Click the I'll Choose What I Work On button
  4. Under the Farm Income and Expenses heading, click the Farm Income and Expenses start button
    1. Turbo Tax will then ask you several questions regarding your farm activity, just keep following the steps Turbo Tax lays out...You'll get to the screen to choose exactly what farm income or expense item to work on.
  5. Under the Farm Expenses heading, click on the Common Farming Expense start button
    1. The next screen has a box labeled "Custom Hire", enter your contract labor here.

I have included a couple screenshots to help get you started.

Where do I enter contract labor for my farm

This answer is wrong. The IRS and farmers know that Custom Hire is not the same thing as Contract Labor. Custom Hire (Machine Work) is paid to large equipment operators who bring equipment onsite to due site prep work. There is no place for Contract Labor in TurboTax 2016 Self Employed. It appears that farmers cannot use Turbotax in 2016, because of this error. I called for help and was directed to this same wrong answer.

Where do I enter contract labor for my farm

Custom Hire category in TurboTax can be used for ANY contract labor or services (large or small) that your farm hires where the service is provided by someone other than a W-2 employee. This includes anyone you issued a 1099-misc to. If you feel this does not describe the category correctly, you can always use Other Miscellaneous Expenses under Farm Expenses and label the expenses with your own description.

Where do I enter contract labor for my farm

Are you saying the IRS is wrong and that you and Turbotax are right? Don't take my word for it, look at the proof. Look up Schedule F: Form 1040 Profit or Loss from Farming, Line 13, Custom Hire (Machine Work). That is not the same thing as contract labor and never has been. 

Where do I enter contract labor for my farm

Custom hire is contract hire OR machine hired work. It's a payment for work or services that have been done on your farm to another self employed person or business.

From IRS Instructions for schedule F, page F-6;

Line 13

Enter amounts paid for custom hire or machine work (the machine operator furnished the equipment). Don't include amounts paid for rental or lease of equipment you operated yourself. Instead, report those amounts on line 24a.

https://www.irs.gov/pub/irs-pdf/i1040sf.pdf

Where do I enter contract labor for my farm

Custom Hire is for Machine Work only. It is Custom Hire (Machine Work) not Custom Hire / Machine Work.
IRS instructions indicate that contract labor should be entered on Line 22: Labor Hired.
See definition of Labor Hired:
"You can deduct reasonable wages paid for regular farm labor, piecework, contract labor, and other forms of labor hired to perform your farming operations." These are the IRS's own words found at <a rel="nofollow" target="_blank" href="https://www.irs.gov/publications/p225/ch04.html#en_US_2016_publink1000217890">https://www.irs.gov/pu...>

I haven't completed the Turbotax process for 2016 yet, but they got the Custom Hire input field linked accurately to my Form 1040 in 2015, so hopefully the only problem here is that the experts are giving people the wrong answers.

The correct answer, straight from IRS publications, is that only Machine Hire work is entered as Custom Hire, and contract labor should be entered as Labor Hired.

Where do I enter contract labor for my farm

 

I can't see the screenshots you mentioned. Where do I go?

BarbaraW22
Expert Alumni

Where do I enter contract labor for my farm

Contract labor is entered on line 22, "Labor Hired," on Schedule F. Per the IRS Schedule F Instructions (page F-8), this line is used to report amounts paid for "farm labor." To enter your farm contract labor into TurboTax please see the instructions below:

 

  1. Click on Income & Expenses at the top of the screen, scroll down and click on Show More next to Rentals, Royalties, and Farm
  2. Click on Start or Revisit  next to Farm Income and Farm Rental and select Yes
  3. Then select Edit next to your Farm Name
  4. Scroll down to Farm Expenses and click Start or Update next to Common farming expenses
  5. Scroll down to the box for "Gross Wages" and enter your information (Note: TurboTax has entitled this section as "Gross Wages" but it will be reported on line 22 for Farm Labor.)

 

@dsttexas

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Where do I enter contract labor for my farm

Just another request as to how to see the screenshots or other attachments mentioned by previous posters in this forum.

BarbaraW22
Expert Alumni

Where do I enter contract labor for my farm

I am not able to access the screenshots posted by other users. However, here are some screenshots that relate to the steps that were posted earlier. 

 

Step #4 Farm Expenses

 

 

 

 

Step #5 Gross Wages

 

 

 

 

@dsttexas

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**Mark the post that answers your question by clicking on "Mark as Best Answer"

Where do I enter contract labor for my farm

Thank you Barbara for the succinct instructions. 

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