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How We Save Money ($1000+) On Taxes By Farming



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so recently I was asked on Facebook I

think it's Angela felt a little

different

my wife says Angelia Angelia she asked

me to be a little bit more specific

about the certain tax cuts we get that

as a farm so in this video we're going

to talk specifically about the tax

benefits we get as a farmer in

Connecticut and then we'll give you an

idea of what you might look for in your

own state if you don't live in

Connecticut so let's talk about taking

your money back from the government

because I love doing that anyway I can

do that I asked my wife to not let me

out of this chair

until I did this paperwork not my

favorite thing to do with this with

self-employment or the farm business but

it's a necessity if I get these tax

forms all filled out right and ship them

off I get some nice tax cuts so the

first tax exemption that we get as

farmers is off of sales tax anything

that we buy for the farm whether that's

building supplies feed things we need

for the animals all that we don't have

to pay the 6% sales tax that Connecticut

usually makes you pay on that sort of

thing so there are some stipulations

though just calling yourself a farmer

doesn't mean you're going to have your

sales tax waived

okay little disclaimer here I'm not

giving you tax advice today talk to a

counting this is just telling you what

we did okay that's through let's get

into the details so the first two years

when I got this form it asked me to

prove in the first two years as a

start-up farmer that I was spending more

than $2,500 on the farm business and

after those first two startup years they

want to see you grossing $2,500 so every

year our goal is to gross more than

$2,500 the way that we do that is by

selling whole and half pigs to our

customers in the area and if we if we

gross it's an only gross you don't have

to

it's growth income of more than $2,500

if you do that every year you're

considered legally a farm business and

you will not have to pay 6% on all your

sales tax so is it really worth it

waving that 6% sales tax

absolutely last year we spent $4,000 i'm

he's here at the farm $4,000 so what is

six percent of four thousand you tell me

I'm not really good with math I look at

if you Google six percent of four

thousand they'll give you a number

$240 that's two hundred and forty

dollars that I didn't have to send to

the government that I can keep here on

my farm and reinvest into more

infrastructure more animals and more

feed that's not the only way that we

save that's just the first way and after

I finished filling out this form I'll

get to the next way that we save money

with tax exemptions for farmers most of

this stuff today is going to apply to

just you Connecticut farmers so if

you're a Connecticut farmer you get a

form reg - 8 R this is a renewal

application for a farmer tax exemption

permit they send you with a double-sided

page full of instructions to help you

figure out how to fill out your form I

hate paperwork so bad

to get that exemption you need to gross

more than $2,500 in the state of

Connecticut we grossed more with the

help of our pigs

so we're plenty good there the next way

that we save money in taxes as a farmer

is through PA 490 again this is a

program that Connecticut has your state

may have a different program but it

probably will be something similar the

state understands that farmers need a

lot of land

to do their work and so instead of

making them pay the normal property tax

on all their acres they give them a

discount and it's more geared towards

like corn farmers who have you know

acres and acres maybe 300 400 acres they

would save a significant amount of money

for us we want saving about a thousand

dollars in property taxes each year now

it's not a ton of money but thousand

more dollars that I can put back into my

own farm instead of sending off to the

government to get wasted worth every

penny for me so how do you get your

property tax exemption as a farmer well

you have to prove that you are a farm

business there is no minimum amount of

money that's required to do this you

just have to fill out a form go to your

town hall and they give them the form

the PA 490 form and in that form you

tell them how much of your land you're

using how you're using it what kind of

production you're going to be doing on

the farm they may come out and inspect

your farm and see that you're actually

doing it or they may not I can't tell

you whether or not they're going to do

that some people they want to come out

for some people they don't but you do

need to be a legitimate business selling

things to people you can't just have a

homestead or you know a couple of

chickens and say hey I'm a farmer so

they sold my mom a so to keep up on that

every two years I have to fill out a

form with my towns to reapply for that

exemption and so I'm going to be doing

that now and when I'm done

we'll finish this video up and talk

about how much I save totally and how

it's all worth it back after I felt

another ridiculous

bureaucrat form Oh command done I hate

doing taxes paperwork oh man all this

stuff so here's a last little words of

advice concerning all this stuff first

don't let paperwork and taxes and all

these things scare you from starting a

business it's confusing it's frustrating

find yourself an accountant Mike that

you can use and somebody who can help

walk you through this stuff just just

deal with it it's frustrating it's

annoying I usually do mine light of

course I'm gonna have to pay a fee

because of that but uh don't let it

scare you away from doing it the second

bit of advice kind of what I already

said get a really good accountant if

you're starting a business you can save

lots of money and work things really

smart if you have a counted David on

YouTube just commented mentioned that he

liked our videos that he really liked

our style and then he went on to ask

being that precise with your finances

cost tax credit etc are you using a CPA

so David yes I am using a CPA and the

reason why is because it helps you know

that you're saving all the money you can

save that you're doing everything the

right way that said a lot of this stuff

when I first started I just figured out

myself

I looked into our state regulations in

our town and I saw PA 490 I saw that

that existed same with the sales tax and

a lot of those things you can apply for

either in your Town Hall or online and I

just figured them out get yourself a CPA

a good accountant who you can trust who

understands particularly agricultural

things would be nice if you're in an

agricultural business so you don't miss

any of those tax exemptions is it worth

it all the work that you have to go

through for the exemptions absolutely so

on our sales tip our sales tax each year

we spent you know five six ten thousand

dollars a year on feed animals supplies

for the animals buildings and things

this year were going to be doing a lot

of buildings on the farm which means

we're going to be buying a lot of

materials all that stuff is

tax exempt so imagine spending $10,000

and getting 6% of $10,000 just waive so

that would be $3,600 that you don't have

to pay in sales tax I don't know how I'm

so bad at math I just realized $10,000

times point zero six $600

okay so you'll save $600 I suck at math

which is why you should get yourself an

accountant PA for 90 getting the

property tax exemption yeah there's

another thousand dollars there so

depending on the scale of your farm

business there's a lot of money to be

saved the lessons from this video don't

be afraid of all the paperwork get

yourself some help with a CPA it's

totally worth taking the time to get

your exemptions this makes this is the

difference between a hobbyist and a

business and entrepreneur a lot of

people like growing you know farm-fresh

eggs on the side and maybe sell it to

their friends and family for cash but if

you're serious if you really want to

make a go at this this is what separates

the boys from the men but instead of

separating let's bring them together

throw back thanks to our two question

askers make sure if you have questions

leave them in the comments below because

a lot of times I'll tell people in the

comments hey great question stay tuned

for a future video on that we've made a

lot of videos lately based off of

people's questions so I check the

questions every day I'm here to help and

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