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The Farm CPA

RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Feed Your Harvest Crew and Deduct It!

Oct 26, 2010

We got this question from one of our readers and it would apply to almost any farmer who hires a harvest or planting crew:

"Hi Paul, I was wondering how taxes work on food bought for workers. On our family farm we have a couple part time hired hands who work 200-300 hours a year between planting and harvesting. When working my mother feeds them quite well. Big lunches, dinners, sodas, cookies, deserts, etc. I was wondering if these food purchases are tax deductible? Also, do you know of any good farm tax resources for me to study so I could get a better idea of taxes in relation to farming."

Normally, meals are deductible to an employer at 50% of the cost of the meals.  However, in this case, where the meals are provided to the employee on the employer's work site and for the convenience of the employer, the meals are completely 100% deductible by the employer and the employee does not have to pick up any of it as income.

The rationale behind this is that the harvest crew does not have time to run into town to get a meal and it is more productive for the farmer to provide the meals directly on site and get the job done.  Therefore, the tax laws allow the farmer to deduct the meals in full.

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