When is the optional method of computing net earnings from farm self-employment available?

The farm option operates in either two ways: If you have gross income from farming of $2,400 or less during a taxable year beginning after 1965, you may count as net earnings from farming either the actual net farm earnings or two-thirds of the gross farm income; or If your gross income from farming is over $2,400 and the net farm earnings are less than $1,600 during a taxable year beginning after 1965, you may count as net earnings from farming either the actual net farm earnings or $1,600. Effective with tax years after 12/31/07, the maximum amount of income reportable using the optional method of reporting will be equal to the amount of earnings needed to acquire four quarters of coverage (QC) for a given tax year. To determine the amount of earnings needed to acquire a QC or the amount of earnings needed to acquire four QC's for a given tax year or years effective with tax year 1977 and after, see RS 00301.250.

For example, for tax year 2008, the maximum amount of farm income ... more.

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