We had previously posted on some guidance that the IRS had issued and the took down regarding Farm Income Averaging and Qualified Business Income (QBI).
We now have the final guidance on the IRS website and it is what we expected. When a farmer is calculating the amount of "Electable Farm Income" (EFI), the IRS instructions indicate you need to reduce Schedule F income by other deductions directly related to farming such as self-employment tax deduction, etc.
This new notice simply indicates a farmer needs to reduce their EFI by the QBI deduction form line 9 of Form 1040 that is attributable to farm income. This is not a new concept and the IRS first attempted to explain this but did not do a good job on the wording. This updates it to what we expected.