INSTRUCTIONS: INCOME AVERAGING FOR FARMERS AND FISHERMAN SCHEDULE J
“Income Averaging for Farmers and Fisherman Schedule J Step 1”
A farming business qualifies as the following:
· operating a nursery or sod farm
· raising or harvesting of trees bearing fruits, nuts, or other crops
· raising ornamental trees
· raising, shearing, feeding, caring for, training, and managing animals
· leasing land to a tenant engaged in a farming business, but only if lease payments are based on share of tenant’s production or determined under a written agreement
A fishing business qualifies as the following:
· catching, taking, or harvesting of fish
· attempted catching, taking, or harvesting
· any operations at sea in support of the activities listed above
· leasing of a fishing vessel, but only if payments are based on share of catch or determined under a written lease before lease begins
· compensation as a crew member on a vessel in a fishing business, but only if compensation is based on share of the catch
The IRS provides specific instructions for this form at the following link: https://www.irs.gov/pub/irs-pdf/i1040sj.pdf
“Income Averaging for Farmers and Fisherman Schedule J Step 2”
On line 1, provide the taxable income from your 2011 Form 1040, line 43, or Form 1-40NR, line 41.
“Income Averaging for Farmers and Fisherman Schedule J Step 3”
For lines 2a through 5, refer to page J-2 and J-3 on the instructions provided by the IRS.
“Income Averaging for Farmers and Fisherman Schedule J Step 4”
For line 6, divide the amount on line 2a by 3.0. On line 7, combine the totals on lines 5 and 6. If the amount is -0- or less, enter -0-.
“Income Averaging for Farmers and Fisherman Schedule J Step 5”
For specific instructions on line 8, refer to pages J-4 through J-6 on the instructions provided by the IRS.
“Income Averaging for Farmers and Fisherman Schedule J Step 6”
Refer to the instructions from the IRS on page J-7 for line 9.
“Income Averaging for Farmers and Fisherman Schedule J Step 7”
For line 12, refer to pages J-8 through J-10.
“Income Averaging for Farmers and Fisherman Schedule J Step 8”
For instructions on lines 13 and 16, refer to pages J-11 through J-14.
“Income Averaging for Farmers and Fisherman Schedule J Step 9”
For lines 19,20,21, enter the corrected amount if you amended your return of the IRS made changes.
