If you can claim someone as a dependent on your tax return (for example, your child or parent), that person generally also must file his or her own tax return if any of the following apply.

You must file an income tax return if you are self-employed and you had net earnings of $400 or more from self-employment, even if you do not otherwise have to file a return. See chapter 15.

You also must file a return if you received any advance earned income credit payments from your employer. In addition, you should file a return if you are eligible for the earned income credit, the additional child tax credit, or the health coverage tax credit.

Even if you do not otherwise have to file a return, you should file one if you are due a refund of any income tax withheld or paid.

See the Form 1040 instructions or Publication 501 for more information on who must file a return.

Enter your social security number (SSN) in the space provided on the first line of Schedule F. You need an employer identification number (EIN) if you have a qualified retirement plan or must file an employment, excise, estate, trust, partnership, or alcohol, tobacco, and firearms tax return. Enter that EIN on line D of Schedule F.

Enter your SSN on your individual income tax return (Form 1040), schedule of self-employment tax (Schedule SE), and estimated tax payment voucher (Form 1040–ES), regardless of which identification number you entered on your business returns.

If at least two-thirds of your gross income for 2002 or 2003 was from farming, only one estimated tax payment is due. The required annual payment is the smaller of the following amounts.

If you qualify to use these special rules but your tax year does not start on January 1, you can file your return and pay the tax by the first day of the 3rd month after the close of your tax year. Or you can make your required annual payment within 15 days after the end of your tax year. Then file your return and pay any balance due by the 15th day of the 4th month after the end of your tax year.

This form is the income tax return. List taxable income from all sources on Form 1040, including profit or loss from farming operations as figured on Schedule F (Form 1040). Also use this form to figure your tax.

Some amounts, such as tax-exempt interest, may not be taxable, but should be shown on the tax return per form instructions.

List nonbusiness itemized deductions on this schedule.

Report interest or dividend income of more than $1,500 on this schedule.

List income and deductions and determine the net profit or loss from a nonfarm business on this schedule.

You can use this schedule in place of Schedule C if nonfarm business expenses are $2,500 or less and other requirements are met.

Report gains and losses from the sale of capital assets on this schedule.

Report income or losses from rents, royalties, partnerships, estates, trusts, and S corporations on this schedule.

Use this schedule to list all farm income and deductions and to determine your net farm profit or loss.

Use this form to average farm income.

Figure self-employment tax on this schedule. See chapter 15.

Figure any underpayment of estimated tax and any penalty on Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts.

Figure any underpayment of estimated tax and the penalty on Form 2210–F, Underpayment of Estimated Tax by Farmers and Fishermen, if you are a qualified farmer.

Figure the investment credit on Form 3468, Investment Credit. See chapter 9.

Figure the general business credit on Form 3800, General Business Credit. See chapter 9.

Figure the credit for federal excise tax on gasoline and special fuels on Form 4136, Credit for Federal Tax Paid on Fuels. See chapter 18.

Figure the increase in tax from the recapture of investment credit on Form 4255, Recapture of Investment Credit. See chapter 9.

Claim deductions for depreciation and amortization and elect the section 179 deduction on Form 4562, Depreciation and Amortization. See chapter 8.

Report gains and losses from business and nonbusiness casualties and thefts on Form 4684, Casualties and Thefts. See chapter 13.

Report gains and losses from the sale or exchange of business property and from certain involuntary conversions on Form 4797, Sales of Business Property.

Report farm rental income on Form 4835, Farm Rental Income and Expenses, if you received it as a share of crops or livestock produced by a tenant and you, the landlord, did not have an arrangement that required you to materially participate or you did not materially participate in the operation or management of the farm. See chapter 4.

Figure the alternative minimum tax on Form 6251, Alternative Minimum Tax—Individuals. See chapter 14.

Report the purchase and sale of assets under certain circumstances on Form 8594, Asset Allocation Statement Under Section 1060.

Report the exchange of business or investment property for like-kind property on Form 8824, Like-Kind Exchanges. If you have any taxable gain, you must also file Schedule D (Form 1040) or Form 4797. See chapter 10.

If you paid wages subject to FUTA tax during a calendar year, file Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, by January 31 of the following year. If all the tax due was deposited by January 31, you have 10 additional days to file. See chapter 16.

Form 940–EZ is a simplified version of Form 940. See chapter 16.

If you paid wages for farm labor that were subject to social security and Medicare taxes or income tax withholding, file Form 943, Employer's Annual Federal Tax Return for Agricultural Employees, by January 31 of the following year. If you deposited all the tax due by January 31, you have 10 additional days to file. See chapter 16.

Figure and pay estimated tax on Form 1040–ES, Estimated Tax for Individuals. See Estimated Tax Payment and Return Due Dates, earlier.

A farm partnership files Form 1065, U.S. Return of Partnership Income, by the 15th day of the 4th month following the end of the partnership tax year. For a calendar year partnership, the due date is April 15. See Partnership, later.

A corporation files Form 1120, U.S. Corporation Income Tax Return, by the 15th day of the 3rd month following the end of the corporation's tax year. For a calendar year corporation, the due date is March 15. See Corporation, later.

Many small corporations can use Form 1120–A, U.S. Corporation Short-Form Income Tax Return, instead of Form 1120.

An S corporation files Form 1120S, U.S. Income Tax Return for an S Corporation, by the 15th day of the 3rd month following the end of the S corporation tax year. For a calendar year S corporation, the due date is March 15. See S Corporation, later.

If you use certain vehicles registered or required to be registered in your name on public highways, such as a truck or truck tractor, file Form 2290, Heavy Highway Vehicle Use Tax Return, for the following purposes.

See the instructions for Form 2290.

Apply for an extension of time to file your tax return on Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Filing this form does not extend the time to pay any tax due.

Employment taxes are deposited manually with Form 8109, Federal Tax Deposit Coupon. In general, income tax withheld plus the employer and employee's share of social security and Medicare taxes that total $2,500 or more for the year must be deposited. The IRS will send you a coupon book for making deposits 5 to 6 weeks after you receive an employer identification number (EIN) if you indicate you will pay wages.

If you move, notify the IRS of a change in your home or business address with Form 8822, Change of Address. Be sure to include your suite, room, or other unit number.

See chapter 21 for information about getting any of the forms listed in this section.

If you are in a trade or business such as farming and you employ paid workers, prepare Form W–2, Wage and Tax Statement, for each employee, including any payment that was not in cash. Show, in the space marked Wages, tips, other compensation, the total paid to the employee. Send Copy A of each Form W–2 to the Social Security Administration with a completed Form W–3, Transmittal of Wage and Tax Statements, by the last day of February. See chapter 16.

Report interest of $600 or more paid during the calendar year in the course of your farm business, including interest on installment sale contracts, on Form 1099–INT, Interest Income.

In the course of your farm business, if you make total payments of $600 or more during the calendar year to another person, other than a corporation or an LLC that is taxed as a corporation, you must file information returns to report these payments. Report on Form 1099–MISC, Miscellaneous Income, payments of $600 or more made for custom harvesting, crop spraying, services of a veterinarian, rents, commissions, fees, prizes, awards, and services provided by nonemployees. Payments of $10 or more for royalties are also reported on Form 1099–MISC.

Form 1099–MISC is used to report to the payee, and to the IRS, payments you made that were subject to backup withholding and the amounts you withheld, regardless of the amount of the payment.

Report payments for compensation to employees on Form W–2, not on Form 1099–MISC. See chapter 16.

If you are required to file Forms 1099–INT or Forms 1099–MISC, prepare a separate form for each payee. File one copy of each form with the IRS by February 28 (March 31 if filing electronically) of the year following the calendar year the payments were made. Give the payee a statement (or copy of the form) by January 31 of the year following the calendar year the payments were made. These forms are read by machine and there are very specific instructions for their preparation and submission. Form 1099 can be issued electronically if the recipient consents to receive it that way. See the General Instructions for Forms 1099, 1098, 5498, and W–2G.

When sending copies to the IRS, use a separate transmittal, Form 1096, Annual Summary and Transmittal of U.S. Information Returns, for each different type of 1099 form.

If you file information returns late, without all the information required to be on the return, or with incorrect information, you may be subject to a penalty. See the General Instructions for Forms 1099, 1098, 5498, and W–2G for information on Form 1099 penalties.

In certain cases, the law requires you to withhold income tax at a rate of 28% (backup withholding) on payments reportable on information returns, including commissions, nonemployee compensation, and other payments you make for services in your farm business or other business activities. The backup withholding rules do not apply to wages, pensions, or annuities.

See the General Instructions for Forms 1099, 1098, 5498, and W–2G for more information.

Members of a family can be partners. To be recognized as a partnership for federal tax purposes, a partner relationship must be established and certain requirements must be met. For information on these requirements, see Family Partnership in Publication 541. Merely doing chores, helping with the harvest, or keeping house and cooking for the family and hired help does not establish a partnership.

If a husband and wife are partners in a farm operation or other business, they should report their partnership income or loss on Form 1065. See Form 1065, later.

Mere co-ownership of property that is maintained and leased does not constitute a partnership. For example, if an individual or tenants-in-common of farm property lease that property for a cash rental or a share of the crops, a partnership is not necessarily created. However, tenants-in-common may be partners if they actively carry on a farm or other business operation and share in its profits and losses. A joint undertaking merely to share expenses is not a partnership.

Each partner's distributive share of partnership income, gain, loss, etc., must be included on that partner's tax return, even if the items were not distributed.

A limited partner generally does not include his or her distributive share of income or loss in computing net earnings from self-employment.

Unless you are a limited partner, your distributive share of income from a partnership is self-employment income. If you and your spouse are partners, each should report his or her share of partnership income or loss on a separate Schedule SE (Form 1040), Self-Employment Tax. The self-employment tax of a member of a partnership engaged in farming is discussed in chapter 15.

Reporting the partnership income on separate Schedules SE will give each of you credit for social security earnings on which retirement benefits are based.

When you create a partnership, you generally do not recognize gain or loss on contributions of money or property you make to the partnership. However, you generally recognize gain or loss when you sell or exchange your interest in the partnership.

Partnerships file a return on Form 1065, U.S. Return of Partnership Income. This is an information return showing the income and deductions of the partnership, the name and address of each partner, and each partner's distributive share of taxable income, etc.

Form 1065 is not required until the first tax year the partnership has income or deductions. In addition, it is not required for any tax year a partnership neither receives income nor pays or incurs any expenses treated as deductions or credits for federal income tax purposes.

Use Schedule F (Form 1040) to report a farm partnership profit or loss. This schedule should be filed with Form 1065. The profit or loss shown on Schedule F, adjusted for separately stated items to be reported on Schedule K-1 and Schedule K of Form 1065, is entered on line 5 of Form 1065. See Form 1065 instructions for more information.

Each partner's distributive share of partnership items, such as ordinary income or loss, capital gain or loss, net earnings from self-employment, etc., is entered on Schedule K–1 of Form 1065. Fill in all schedules that apply to the partnership.

In the following situations, a penalty is assessed against a partnership that is required to file a partnership return.

The penalty is $50 times the total number of partners in the partnership during any part of the tax year for each month (or part of a month), up to 5 months, the return is late or incomplete.

A partnership does not have to pay the penalty if it can show reasonable cause for failure to file a complete or timely return. A small farm partnership with 10 or fewer partners is generally considered to meet this requirement if the following information can be shown.

For more information on partnerships, see Publication 541.

Certain businesses formed after 1996 are taxed as corporations. They include the following.

For more information, see the instructions for Form 8832, Entity Classification Election.

A corporation is formed by a transfer of money, property, or both by prospective shareholders in exchange for capital stock in the corporation.

If you transfer property (or money and property) to a corporation in exchange for stock in that corporation, and immediately afterward you are in control of the corporation, the exchange is usually not taxable.

If, in an otherwise nontaxable exchange, you also receive money or property other than stock, you may have to recognize gain. See Publication 544 or Publication 542 for more information.

Corporate profits are taxed to the corporation. If the profits are distributed as dividends, the dividends are taxed to the shareholders.

In figuring its taxable income, a farm corporation generally takes the same deductions that a noncorporate farmer would claim on Schedule F (Form 1040).

Unless exempt under section 501 of the Internal Revenue Code, all domestic corporations (including corporations in bankruptcy) must file an income tax return whether or not they have taxable income. A corporation must generally file Form 1120 to report its income, gains, losses, deductions, credits, and to figure its income tax liability. However, a corporation may file Form 1120–A if its gross receipts, total income, and total assets are each under $500,000 and it meets certain other requirements. For more information, see the instructions for Forms 1120 and 1120–A.

For more information on corporations, see Publication 542.

Although it is generally not liable for federal income tax itself, an S corporation may have to pay the following taxes.

An S corporation may have to make quarterly estimated tax payments for these taxes.

An S corporation files Form 1120S.

For more information on S corporations, see the instructions for Form 1120S.