Running a farm requires the proper equipment, which generally includes a truck. Buying a truck for your farm includes researching your options to ensure you make the best choice. The Internal Revenue Service (IRS) allows you to deduct the cost of machinery required to maintain the operation of your farm on your taxes, and this deduction usually includes a farm truck. Keeping proper accounting records in conformance with IRS guidelines is important to prove that you are entitled to the deductions you claim on your tax return.
Things You'll Need
- Loan documents
- Registration application
Write a list of specific jobs or tasks that you will need a farm truck to carry out. This allows you to review your particular needs on your farm and determine what size and model truck will work best.
Determine the amount of time you plan to use your truck on the farm. Using your truck at least 75 percent of the time for farm-related work allows you to deduct the expense under IRS guidelines.
Locate a dealer in your area. Common brands of trucks used on farms include Ford, Chevrolet and Dodge, as they are available in three-quarter and one-ton models. This capacity makes them suitable for hauling heavy farm equipment, hay, or trailers. Larger trucks are available as well. Also, consider purchasing a farm truck with a diesel engine since farmers receive a discount on diesel fuel for farm use.
Obtain financing either through your bank, a loan company, or the dealer. Compare offers available for purchasing a farm truck, including the interest rate, terms, and refunds available.
Complete the loan process with the lender of your choice. Be prepared to provide the lender with your tax returns for the past two years as well as proof of income to show that you can repay the loan.
Register your vehicle with the state by completing the application for farm vehicles. Some states provide special status for your farm truck; Oregon is one example (see Reference 3.) For instance, the fee for a tag is generally lower. Keep all records of taxes, license fees, and other expenses for IRS tax deductions.