We get bombarded with information about seminars this time of year. The price tag is often hefty, plus travel and overnight expenses. How do we sort out which ones might pay? My brother and I farm together, and our wives work off the farm. If we go to one and take them along, can we write the trip off as a business expense?
The Profit Planners panel includes: David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue University Extension educator, Greencastle, Ind.; Steve Myers, farm manager, Busey Ag Resources, Leroy, Ill.; and Chris Parker, cattleman, forage and timber producer, Morgantown, Ind.
Erickson: Many of these seminars are a great way to get some information about a specific area of interest while having the chance to network with others for additional valuable experience. If you have questions about a seminar, ask the sponsor for references of previous attendees you could contact. You and your brother might consider going to different seminars so you can share information. The expense of attending these learning seminars could be a legitimate business expense if properly documented. If your wives are employed off-farm and are not involved in the farm business, then their expenses may not be deductible.
Evans: Often coffee shop or lunch restaurant talk is a source of learning about terrible or very good events by those going to meetings and programs. Also, consider who you think is successful or someone you respect as a really good farmer. What events do they attend? Perhaps they’ve been on panels or programs. Find what program offers the greatest possible return to your farming operation. What does the rest of the family feel is needed, since they’re involved as well? In some cases, you may all want to attend together. In other cases, you may want to conquer more meetings by splitting up and sharing when you return.
Since you and your brother have income from the farm, expenses of travel, meals, lodging and registration would be deductible from your farm income. Your wives’ registration fees would be deductible from your farm income. Your wives’ registration fees would also be deductible particularly if they are legally part of the corporation, partnerships, limited liability company or other legal entity.
Myers: Legitimate continuing education, both for the event and travel, can be a deductible business expense. I advise to confirm, as it relates to your operation, what is acceptable with your tax preparer, and to retain documentation and receipts that accompany such activity in the event of an audit. To manage expenses and efficiency, consider taking turns with your brother as to what events you attend, taking good notes and reporting back to each other on the seminar.
Parker: My thought would be to pursue the seminar offering the greatest return to your farming enterprise. That is, where do you, your brother and wives feel additional specialized education would be the most beneficial: soils and fertility, financial, marketing or other areas? Since your and your brother’s incomes derive solely from the farm, your expenses would be covered. In my opinion, your wives’ registration fees would also be covered, especially if they are legally part of the corporation or other legal farm entity. Per usual, a call or visit to your accountant would help clarify the situations. Be sure to enjoy some relaxation with your spouse and some family time in conjunction with the educational seminar.