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Income Averaging for Farmers and Fishermen - eFile

Income Averaging for Farmers and Fishermen - eFile 2025

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The document is the 2016 Schedule J (Form 1040) for Income Averaging for Farmers and Fishermen, provided by the Internal Revenue Service. It outlines the process for calculating taxable income and tax liability for farmers and fishermen using income averaging methods over multiple years. The form includes instructions for entering various income figures, capital gains, and tax rates from previous years to determine the final tax amount owed.

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Click 'Get Form' to open it in the editor.
Enter your Social Security Number (SSN) and the name(s) as shown on your return at the top of the form.
For line 1, input your taxable income from your 2016 Form 1040, line 43, or Form 1040NR, line 41.
On line 2a, enter your elected farm income. Ensure this amount does not exceed what you entered on line 1.
Complete lines 2b and 2c if applicable, detailing any capital gains or unrecaptured section 1250 gain.
Subtract line 2a from line 1 for line 3. Then calculate the tax on this amount using the provided tax rates for the year.
Follow through with lines 5 to 23 as instructed, ensuring all calculations are accurate based on previous years' data where required.
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2019	4.4 Satisfied (740 Votes)
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2017	4.4 Satisfied (168 Votes)
2016	4.4 Satisfied (436 Votes)

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We have answers to the most popular questions from our customers. If you can't find an answer to your question, please contact us.

When did the IRS stop income averaging?

Income averaging was a tax break that assisted people with large income deviations up until 1986. After the 1986 Tax Reform Act, income averaging was eliminated for everyone except fishermen and farmers.

Does IRS allow income averaging?

Who can use Income Averaging? You must be engaged in farming, ranching, or commercial fishing. The IRS states that income from your trade or business of farming or fishing. There are some additional limitations so please refer to the below link.

Can retirees use income averaging?

Forward averaging allows taxpayers to spread that lump-sum retirement income over several prior years, typically either five or ten years. Without forward averaging, a lump-sum distribution from a retirement plan may push a taxpayer into a higher tax bracket.

How do you report farm income and expenses?

Use Schedule F (Form 1040) to report farm income and expenses. File it with Form 1040, 1040-SR, 1040-SS, 1040-NR, 1041, or 1065. Your farming activity may subject you to state and local taxes and other requirements such as business licenses and fees. Check with your state and local governments for more information.

Can you still do income averaging for taxes?

The Internal Revenue Code only allows income averaging to farmers and fishermen. If you are a farmer or fisherman, you need to complete Schedule J, Income Averaging for Farmers and Fishermen.

What is the income averaging rule?

Income Averaging: An Explainer Historically, the LIHTC program served families with incomes below 60 percent AMI. Income averaging allows for the averaging of incomes up to 80 percent AMI in a project, or as low as 30 percent AMI, as long as the average stays below 60 percent AMI.

Income Averaging for Farmers and Fishermen - eFile 2025

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When did the IRS stop income averaging?

Does IRS allow income averaging?

Can retirees use income averaging?

How do you report farm income and expenses?

Can you still do income averaging for taxes?

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What is the income averaging rule?

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Income Averaging for Farmers and Fishermen - eFile 2025

Here's how it works

The easiest way to modify Income Averaging for Farmers and Fishermen - eFile in PDF format online

See more Income Averaging for Farmers and Fishermen - eFile versions

Complete this form in 5 minutes or less

Got questions?

When did the IRS stop income averaging?

Does IRS allow income averaging?

Can retirees use income averaging?

How do you report farm income and expenses?

Can you still do income averaging for taxes?

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People also ask

What is the income averaging rule?

Related links

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