The latest session of Field School was focused on the legal side of starting and owning a small business. Half of the class was spent discussing the different types of businesses and pros and cons of each, and the rest of the class was lead by two insurance professionals from Farm Bureau who answered our students’ many questions. (Note: we don’t endorse Farm Bureau, but we do draw on their expertise in these ag-related subjects because it is what they specialize in.)
Below are some of the tools given to our students related to this topic.
- Farms need to use the Schedule F tax form to file their farm income and expenses. Hiring an experienced accountant will ensure that you are able to get the most out of your deductions and depreciations, but it is quite possible to file your own taxes each year. Either way, make sure you maintain a good record keeping habit and keep ALL of your farm related receipts. Our speaker on this topic was Jeanie Scalf (Washington County Farm Bureau Tax Service, 423-913-4500 jeanie.scalf@tfbf.com)
Insurance (Farm Commons Insurance Tip Sheet)
- Having the right insurance policy can protect your investment into your property and equipment, protect you from lawsuits filed against your products, cover any employees who are injured on the job, and more. Our presenter was Roger Fields (Johnson City Farm Bureau Insurance, 423-283-4780, Roger.Fields@fbitn.com).
- More resources on the Farm Commons Website.
Business Structures (Choosing an Entity Flowchart)
- There are a lot of options for business entities, but the easiest one to get started with is a Sole Proprietorship. You don’t need to file any special paperwork, but all of the liability for the business falls on you. If you are working with business partners or are looking for more protection for your assets, an LLC might be a better choice. Talking with an accountant and/or a lawyer can help you work out which option is best for your situation.
- More resources on the Farm Commons Website.
Hiring Employees
- There are several handouts that are in the Dropbox file that didn’t get printed for your binders.
- Farm Labor Management – a very thorough guide on all you need to consider when hiring labor on your farm.
- Farm Employment Law: Know the Basics
- Minimum Wage Exemptions Under FLSA – there are some exemptions for agricultural workers
- Positive Labor Practices
Farm Service Agency Number (Getting Your FSA Number)
- One of the first and most important steps for starting your farm is getting your Farm Number from the Farm Service Agency. This number is needed for your taxes and to access State and Federal cost-share and grant programs (we’ll discuss these in great detail at the March 28 Field School).
TN Sales Tax Exemption (How Do I Apply for the TN Ag Exemption?)
- Certain purchases for your farm are exempt from sales tax, but you have to file paperwork with the state to get your exemption status.
- More info and forms here.