Industries / Agriculture
Farm accounting and farm tax in
Idaho and Utah
Bookkeeping, payroll, tax planning, and advisory for farms, dairies, and agribusiness.
See the approach
The short answer
What does a farm accounting firm do for an Idaho or Utah operation?
A farm accounting firm keeps the books, runs payroll, plans farm tax, and prepares financial statements for farms and dairies. Cooper Norman does this in Idaho and Utah, with H-2A and E-Verify payroll help.
The Challenge
Farm choices come up
all year.
A grain sale, a feed contract, or a seasonal hire can come up in any week of the year. Each one changes your tax bill and your cash on hand, and the effect depends on which tax year it lands in. When the books are behind, you often see that effect only at filing time.
Books kept current
Approved invoices paid, bank accounts reconciled, and your line of credit tracked each month.
Farm tax planning
We use deferred payment contracts, prepaid inputs, equipment write-offs, and farm income averaging. We also look at how the business is set up.
Transition and valuation
A current value for the operation and a plan for who owns and runs it next.
Management advisory
Restructuring debt, comparing lease and purchase options, and tracking government program deadlines. We also track costs by crop, field, or herd.
Cooper Norman Approach
How we work
with your farm.
- Keep your books current each month, through planting, irrigation, and harvest
- Plan the year's farm tax with you
- Run the numbers on an equipment purchase or a land offer
- Prepare the financial statements your lender asks for
Result
Numbers you can
plan with.
Your books stay current each month, so you can see what a sale or a purchase does to this year's tax.
Key terms
What do these
farm accounting
terms mean?
- Crop year: the season from planting through harvest and sale. It often crosses December 31, so a sale, its payment, and its costs can fall in different tax years.
- Deferred payment contract: a sale made this year under a contract that pays next year. A cash-method farmer generally reports that income when the payment arrives.
- Prepaid farm supplies: feed, seed, fertilizer, and similar inputs paid for this year and used next year. For a cash-method farmer, the deduction can be limited to 50% of other deductible farm expenses.
- Equipment expensing: writing off machinery in the year it goes into service, through Section 179 or bonus depreciation, instead of over many years.
- Farm income averaging: an election on Schedule J. It taxes some farm income at the rates of the 3 prior years, called base years.
- Enterprise crop cost accounting: tracking inputs, labor, and equipment by crop, field, or herd. Each one then shows its own profit or loss.
- Milk check: a dairy's monthly milk payment. It arrives with its own deductions and assignments.
- H-2A worker: a foreign national hired through a federal program for a temporary or seasonal farm job.
- E-Verify: a federal online system. It checks a new hire's Form I-9 against government records to confirm the person can work in the U.S.
How our farm work compares
State rules
What changes for a farm in
Idaho versus Utah?
Here is how five state rules compare. Both lists follow the same order.
Idaho
- State income tax rate: 5.3% for 2025.
- Sales tax exemption certificate for farm inputs: Form ST-101, the Sales Tax Resale or Exemption Certificate, with a producer exemption box checked.
- Which inputs qualify: items used primarily and directly in farming or ranching.
- Farmland property tax assessment: more than 5 contiguous acres actively devoted to agriculture.
- Farms in the 2022 Census of Agriculture: 22,877 on 11.5 million acres.
Utah
- State income tax rate: 4.5% since January 1, 2025.
- Sales tax exemption certificate for farm inputs: Form TC-721, the Utah Sales Tax Exemption Certificate, with the Agricultural Producer box checked.
- Which inputs qualify: items used primarily and directly for commercial farming.
- Farmland property tax assessment: at least 5 contiguous acres, actively devoted to agricultural use for at least 2 years in a row.
- Farms in the 2022 Census of Agriculture: 17,386 on 10.5 million acres.
Sources: Idaho State Tax Commission, Utah State Tax Commission, Idaho Code 63-604, Utah Code 59-2-503 (Farmland Assessment Act), and USDA NASS 2022 Census of Agriculture state profiles. Smaller parcels can qualify under added tests in each state. Check the current year's rules before filing.
Farm succession
How do you hand the farm to the
next generation?
Farm succession decides who runs the operation next, who owns the ground, and how the tax gets paid without selling land to cover it. Start with a current valuation, then compare three paths: give now, sell over time, or pass assets at death.
In the 2022 Census of Agriculture, about 35% of producers in Idaho and in Utah were 65 or older.
Which federal rules shape a farm transfer in 2026?
- Estate and gift tax exclusion (basic exclusion amount): $15,000,000 per person for 2026. It is adjusted for inflation starting in 2027.
- Annual gift exclusion: $19,000 per person you give to in 2026.
- Special use valuation (Section 2032A): an estate can value qualifying farmland at its farm use instead of its market value. The cut in value is capped at $1,460,000 for 2026. Farm property must be at least 50% of the estate's adjusted value, and farm real estate at least 25%. Heirs who sell the land or stop farming it within 10 years of the death can owe added estate tax.
- Estate tax over time (Section 6166): this applies when a farm or other closely held business is more than 35% of the adjusted gross estate. The executor can put off the tax for up to 5 years, then pay it in up to 10 installments. Interest is still due every year.
- Basis: land you receive as a gift generally keeps the giver's basis. Land you inherit generally takes its fair market value on the date of death.
Cooper Norman sets the value and prices the tax of each path before documents are signed. We coordinate with your attorney, who drafts the agreements, and with your outside wealth and insurance advisors. Next, read estate tax planning for Idaho farm families. Or see business transition planning and agricultural business valuation.
Frequently Asked Questions
How do I find a farm accountant near me in Idaho or Utah?
Cooper Norman is a farm accountant for Idaho and Utah producers. Our offices are in Idaho Falls, Blackfoot, Rexburg, Pocatello, Twin Falls, and Pleasant Grove, Utah. We work with cattle, dairy, row crop, and specialty operations, on cash or accrual accounting, and help with Farm Bill compliance.
Who needs an agriculture accountant?
Any farm, ranch, dairy, or agribusiness owner who wants the books and taxes done with farm rules in mind. Farm income, equipment, and government program payments each get their own treatment in the tax code. An accountant who works with farms knows these rules and plans around them during the year.
Why Cooper Norman for agriculture accounting?
Agriculture and dairy are priority work for the firm, and we have an industry group just for food and agriculture. When a farm question turns into a valuation or transition question, a CPA, CVA, or ABV here takes it.
When should farm tax planning happen?
Before year end. Several farm tax moves have to be made before the year ends, such as signing a deferred payment contract, prepaying next year's inputs, or putting new equipment into service. We plan with you during the season and file after the year is over.
What does bookkeeping cover?
We pay approved invoices and reconcile your bank accounts. We post sales and payments and keep track of what you owe and what you are owed. We also watch your line of credit and prepare monthly statements if you want them.
Can you run payroll, including H-2A workers?
Yes. We run payroll each payday and handle the monthly, quarterly, and yearly payroll filings. For seasonal crews, we help with H-2A workers and E-Verify.
Do you prepare financial statements?
Yes. We prepare cash and accrual basis statements, plus compilations, reviews, and audits. When a lender or a transaction calls for one, we also prepare fair market value statements. During the season, we can compare your budget to actual results.
Do you work with dairies?
Yes. We post each month's milk check, with its deductions and assignments, as part of the monthly books. We also track feed costs and the accounting for the herd, which a lender will ask about.
Can you help with succession of the operation?
Yes. Business transition planning is a separate service at the firm. We value the operation and show the tax cost of each way to pass it on, whether it goes to family or to an outside buyer. Your attorney drafts the agreements.
What do consulting and advisory services include?
Business management and planning, debt restructuring, analysis of lease and purchase agreements, equipment trade timing, government program assistance and deadlines, enterprise crop cost accounting, and help buying, selling, and trading farmland and machinery.
How much farm equipment can be expensed in 2026?
Up to $2,560,000 under Section 179 for tax years that begin in 2026. That limit drops dollar for dollar once the Section 179 property you place in service that year costs more than $4,090,000. Section 179 is also limited to your taxable business income. Bonus depreciation is 100% for qualified property acquired and placed in service after January 19, 2025. Compare the two in Section 179 vs. bonus depreciation for farm equipment.
Are H-2A wages subject to Social Security, Medicare, and FUTA tax?
No. Pay to H-2A workers for farm work done under the visa is exempt from Social Security, Medicare, and federal unemployment (FUTA) tax. For pay in 2026, you still report pay of $2,000 or more in box 1 of Form W-2 (the threshold was $600 for 2025). You do not have to withhold federal income tax unless the worker asks and you agree. If a worker you pay $2,000 or more in 2026 gives you no taxpayer ID number, backup withholding applies, and you report the pay on Form 1099-MISC. More in H-2A farm labor accounting and tax compliance.
Can I sell farmland to another farmer and pay the tax over four years?
Yes, if the sale qualifies. This applies to tax years that begin after July 4, 2025. Section 1062 lets a seller pay the income tax on the gain in four equal yearly installments. The first one is due with the return for the year of the sale, by its due date without extensions. The buyer must be a qualified farmer, meaning an individual actively engaged in farming. The land must have been farmed by the seller, or leased to a qualified farmer, for substantially all of the 10 years before the sale. It must also carry a covenant or other legally enforceable restriction that keeps it in farming for 10 years after the sale. Your attorney drafts that restriction. Cooper Norman prices the tax.
Does Idaho give farmers a capital gains break?
Yes. The Idaho capital gains deduction is up to 60% of the capital gain net income from qualifying Idaho property, figured on Form CG. Land, including grazing permits, must be held at least 12 months. Cattle and horses must be held at least 24 months, and breeding livestock at least 12 months. Check the holding period before the sale closes.
Who leads this work
Blake Johnson, CPA
Managing Partner, Chair of Food and Agriculture Industry
Blake Johnson, the firm's managing partner, chairs the food and agriculture industry group.
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