Taxes. Simply saying “taxes” makes me cringe. Why? Because it’s a giant pain-in-the-butt. Every year I deal with a never-ending list of forms, files, figures and fractions, but things could be much more difficult.
In fact, I have it pretty easy.
Think about it, there was a day when taxes had to be done by hand. Inventories had to be hand-written. Calculations were done with pen and paper. Oh, we’ve come so far. Thanks to technology we have the tools to take the sting out of tax preparation and financial management.
I have here a short list of applications that can help farmers, rancher or anybody with a small business, keep track of farm expenses, inventory, deductions and taxes.
Something to remember: Software is only as smart as the user. Many of these programs give the user the tools to accomplish very specific and complicated tasks, but you must be willing to invest time into learning the program and what it’s capable of.
If you have specific questions about taxes, read the IRS’sFarmer’s Tax Guide.
Note: I’ve personally used 3 of these applications. I’ve never used QuickBooks, but the program is highly recommended by the Ohio State University Extension. Though software can help,nothing can replace a good accountant.
Apparently I’m a big eater…
Mint.com, from Intuit, is a personal finance management website that integrates all of your finances in one place. I’ve been using this particular service for about two years now and it’s helped me to budget and save a little money.
Users can upload information for auto loans, student loans, credit cards, bank accounts, savings accounts, investments and basically anything else that impacts your finances. Mint then monitors and tracks everything.
Have a bill coming up soon? Mint sends an email to your inbox. Spent too much money on fast food this month? Mint will send a text message telling you.
Mint also offers visuals that help put things into perspective. Want to see how much you spend on groceries vs. fast food? Mint can spit out a pie chart that puts all of your expenses in one place.
Is it useful for tracking inventory? Not really. This isn’t an application designed for complicated business-type management. Though, if you’re a hobby farmer or even an avid gardener, this may come in handy.
Mint is a free service.
This is another Intuit product. When it comes to tax time, I’ve used Turbo Tax for the last few years. Using Turbo Tax was a good decision because I received an audit notice in the mail last week. Thankfully, the service kept all of my old income tax documents in its system.
Turbo Tax is nice because the service takes users’ hands and leads them through the confusing world of taxes in a way that’s easy to understand. Users can also import tax information from the previous year.
It’s also nice to see the refund calculator add up those tax deductions.
The service also allows users to e-file. I filed my taxes last night. Today I received emails letting me know my paperwork was accepted. According to Turbo Tax, I should see a refund sometime in the next couple of weeks.
Turbo Tax offers different levels of service, giving users several options when tax time comes. Though Turbo Tax does offer a free option, it’s limited to filing federal taxes. If you want to file your state taxes using Turbo Tax, it’ll cost you a little more money.
I filed my federal and state taxes, received my maximum refund and am having it direct-deposited into my checking account for less than $100.
The QuickBooks name has become synonymous with accounting and finances. Why? Because the software is robust enough for business, but simple enough for non-professional bookkeepers.
QuickBooks offers several different plans
The reason I recommend QuickBooks online rather than purchasing the software is the online version is accessible from anywhere with Internet access. If that sounds scary, don’t worry, Quickbooks is very secure.
When users purchase a subscription to QuickBooks Online, they also purchase access to all future upgrades to the software, customer support and the ability to share your financial data with who you choose. That ability to share your information is nice because it allows your personal accountant to keep up-to-date on your financial records.
Multiple users can use QuickBooks online at the same time. This feature can be useful for businesses that have offices located in different areas.
Mark Wilsdorf, editor of AgriComp Magazine, wrote a book called, “The QuickBooks Farm Accounting Cookbook.” I recommend picking up a copy.
QuickBooks Online is a monthly subscription-based service.
You Need A Budget
This isn’t just another personal finance application, it’s a little bit more. The biggest difference between You Need a Budget and an app like Mint is: YNAB actively tries to help you solve money problems. The program tries to promote a philosophy as well as track your finances.
The program’s main goal is to get its users living on last month’s income.
YNAB is designed for people who are living paycheck to paycheck, are in debt or who need help saving more money each month.
Here’s the four principles of YNAB:
- Stop living paycheck to paycheck
- Give every dollar a job
- Save for a rainy day
- Roll with the punches
Unlike Mint, YNAB forces users to input transactions. This can be a turn-off for some, but YNAB is trying to promote a healthy-spending philosophy, right?
When it comes down to making a budget, try both Mint and YNAB. Each application has its strengths and weaknesses, but YNAB does cost $60. If that’s out of your price range, I recommend using the free Mint service.
Other useful resources
If you’re looking for more resources on farm management, The Ohio State University Extension has a great website dedicated to money, taxes and record keeping on the farm.
You should also subscribe to the Ohio Ag Manager Newsletter. The newsletter covers a variety of topics important to producers including financial, labor, legal, marketing and human resources issues.
The University of New Hampshire Cooperative Extension is also a good resource for farmers. The extension’s website offers easy-to-read “how to” articles.
Finally, Farm and Dairy has an article covering the basics of the Taxpayer Relief Act of 2012 and what it means to farmers.