If you farm or ranch in Navarro County, your federal return is built on Schedule F, and two deadlines decide how the year ends: you can pay all of your 2026 estimated tax by January 15, 2027, or skip estimated tax entirely by filing the return and paying everything due by March 1, 2027. Texas adds no income tax return, but it does add an agricultural registration and a county appraisal filing with its own calendar. This guide, written November 5, 2026, sets out what a tax accountant needs from a Navarro County operation and when.
Key takeaways
- March 1 replaces estimated tax, if you qualify. Farming income has to be at least two-thirds of gross income in 2025 or 2026. Gross income is not adjusted gross income, and the test is easy to fail if off-farm wages are large.
- Schedule F is a different form from Schedule C. It carries its own expense lines, its own inventory treatment and its own income-averaging election on Schedule J.
- Equipment bought by December 31 is a 2026 decision. The Section 179 election for 2026 tops out at $2,560,000, but the business-income limit usually binds long before the ceiling does.
- Texas runs two separate ag filings. The Comptroller issues the Ag/Timber Number for sales tax. The county appraisal district decides open-space valuation. Neither one is part of your income tax return.
A farm return is a Schedule F return
The IRS reports farm profit on Schedule F (Form 1040), Profit or Loss From Farming. It is not Schedule C, and the difference is not cosmetic. Schedule F has its own expense lines for things a general business form has no room for: feed, seed, fertilizer, chemicals, breeding fees, veterinary costs, custom hire, conservation expenses, and the cost of livestock bought for resale. The IRS publishes a whole guide to it, Publication 225, the Farmer’s Tax Guide.
Three things make the form behave differently from an ordinary business schedule.
Sale of livestock depends on why you held the animal. Animals raised for resale run through Schedule F. Animals held for breeding, draft, dairy or sport are generally depreciable property and leave the return somewhere else.
Farm income can be averaged. Schedule J lets a farmer spread elected farm income back over the three prior years, which matters when one good cattle year or one grain contract lands in a single return at a higher rate.
A hobby is not a farm. Ten acres, a tractor and a few head do not by themselves create a trade or business. The distinction decides whether losses are deductible at all, and it is the single most common reason a small Navarro County operation gets a different answer than it expected.
If what you run is a business with land attached rather than a farm, the shape of that return is covered in our guide to business tax services in Corsicana, and the individual side is in our income tax preparation guide.
The March 1 rule, and the two-thirds test behind it
Most self-employed people pay estimated tax four times a year. Farmers and fishermen get a different option, and in a county where the whole year’s income can arrive in two months, it is the more useful one.
Per IRS Topic 416 and the 2026 Form 1040-ES, read November 5, 2026: a qualifying farmer can pay all 2026 estimated tax in a single payment by January 15, 2027, or make no estimated payment at all and instead file the 2026 Form 1040 and pay the total tax due by March 1, 2027. Either route avoids the underpayment penalty.
The qualification is the part that catches people. Farming income must be at least two-thirds of total gross income, in either 2026 or 2025. The IRS is explicit that gross income here is not adjusted gross income. On a joint return, a spouse’s income counts in the test. An operation where one partner works full time off the farm can fail the two-thirds test without anyone noticing until February.
If you do qualify and choose the January payment, the required amount is the smaller of two-thirds of the 2026 tax or 100% of the tax shown on a full twelve-month 2025 return (IRS, read November 5, 2026).
The practical consequence is a working deadline in early February, not March. A return that has to be complete and paid by March 1 needs its records closed, its depreciation schedule settled and its Schedule F reconciled several weeks earlier.
Equipment bought before December 31 is a 2026 decision
November and December are when the tractor, the grain cart, the stock trailer and the hay equipment get bought, and the reason given is usually tax. The rule that drives it is the Section 179 election: the cost of qualifying equipment expensed in the year it is placed in service, rather than depreciated over its life.
Two limits apply. The dollar ceiling is the headline, and the investment threshold reduces it once total purchases pass a certain point.
Equipment
What you can expense in the year you buy it
Maximum Section 179 election, by tax year. The 2025 tax law roughly doubled the ceiling, and inflation has moved it since.
Source: IRS Publication 946 and Revenue Procedures 2025-32 and 2026-35. Federal rules, read November 5, 2026.
For 2026 the election is reduced once qualifying property placed in service passes $4,090,000, and the sport utility vehicle cap is $32,000 (IRS, read November 5, 2026).
No Navarro County family operation is going to hit $2,560,000. The limit that actually binds is the other one: Section 179 cannot exceed the taxable income from the active conduct of your trade or business. Expense more than the farm earned and the excess carries forward instead of landing this year. Buying a $90,000 tractor in December does not create a $90,000 deduction if the farm shows $30,000 of income.
“Placed in service” is also a date, not a purchase order. Equipment delivered and ready for use on December 28 counts for 2026. Equipment ordered in December and delivered in February does not.
Texas adds two filings, and neither is an income tax return
Texas has no personal income tax, so there is no state return on farm profit. There are two state and county obligations that farmers routinely confuse with each other.
The Ag/Timber Number, from the Texas Comptroller. This is the sales tax side. Per the Comptroller, read November 5, 2026: Ag/Timber Numbers must be renewed every four years, and numbers issued or renewed now expire December 31, 2027. You have to write that expiration date on the exemption certificate you hand a retailer, and blanket certificates on file with your feed store or equipment dealer have to be updated every four years with the current date. A farm machine or trailer can be bought tax-free if it is used at least 80% of the time in qualifying agricultural operations, with the number entered on Form 130-U at titling. A person who does not produce agricultural products for sale is not eligible.
Open-space valuation, from the county appraisal district. This is the property tax side, and it is the one people call an “ag exemption.” It is not an exemption; it is a different basis of valuation, taxing the land on its productivity value rather than its market value. The application is Comptroller Form 50-129, and it goes to the appraisal district that covers your property, not to the Comptroller and not on your federal return. Per Comptroller guidance read November 5, 2026, the filing deadline is before May 1, and land generally must have been devoted to agricultural or timber production for at least five of the preceding seven years.
Your CPA does not file either one for you. But both change the numbers on the return, so they belong in the same conversation as the Schedule F, alongside the payroll question if you carry hired help. If you do, the deposit and quarterly reporting rules are set out under payroll and bookkeeping.
What to bring a tax accountant in Corsicana
Anderson, Marx & Bohl PC has been preparing returns for clients in Navarro County and beyond since 1972, from an office at 119 N Main St in Corsicana, open Monday through Friday, 8:00 a.m. to 5:00 p.m. Whether you are in Corsicana itself or in Kerens, Dawson, Frost, Blooming Grove, Rice, Mildred, Barry, Angus, Powell, Richland, Emhouse, Goodlow, Retreat, Streetman or Oak Valley, that office is the one doing the filing, and the first appointment goes faster with these in hand.
- Sale records by category. Livestock, grain, hay and custom work, separated, with raised animals kept apart from animals bought for resale.
- Government program payments and crop insurance proceeds. These have their own treatment and their own lines.
- The depreciation schedule, current. Every machine, building, fence, well and breeding animal, with purchase dates and what has already been taken.
- Equipment bought or sold this year, with delivery dates, not order dates.
- Fuel, feed, seed, fertilizer, chemical and veterinary invoices, and the mileage or fuel split if a vehicle does both farm and personal duty.
- Your Ag/Timber Number and its expiration date, plus the appraisal district notice if your open-space status changed.
- Payroll records for hired or seasonal labor, including anyone paid in cash.
- Last year’s return, which sets up the two-thirds test and the income-averaging base.
Keeping these in order through the year is bookkeeping, not tax work, and it is the difference between a February filing and a scramble. If your records live in QuickBooks, our QuickBooks guide covers the cleanup; if they live in a shoebox, the small business accounting guide covers where to start. Blank forms and organizers are on our client resources page.
Frequently asked questions
Do I have to file by March 1 if I farm?
No. March 1 is an option, not a requirement. You can also pay all your estimated tax in one payment by January 15, 2027, or file by the ordinary April deadline and pay estimated tax on the normal schedule through the year. The March 1 route is only worth taking if farming is at least two-thirds of your gross income (IRS, read November 5, 2026).
Does the Texas ag exemption lower my income tax?
No. Open-space valuation changes how your county appraisal district values the land for property tax. It does not touch your federal income tax return, and it is granted by the appraisal district, not by the Comptroller or the IRS.
Can I deduct a tractor I bought in December?
Possibly all of it, under Section 179, but only up to the taxable income your farm actually earned from active operations. The excess carries forward. The equipment also has to be placed in service, meaning delivered and ready for use, by December 31 (IRS, read November 5, 2026).
I have 20 acres and sell a few round bales. Is that a farm?
That depends on whether you are carrying on the activity to make a profit, not on acreage. If it is a hobby, the loss rules are different and most expenses are not deductible. It is worth settling the question before a loss year, not after.
Talk to a CPA in Corsicana
Anderson, Marx & Bohl PC provides tax preparation and tax planning for individuals and businesses from its Corsicana office, along with payroll and bookkeeping and audit and review services. You can read more about the firm’s tax services, see what a full-service engagement looks like in our Navarro County CPA firm guide, or contact us to book a consultation.
If the March 1 route is the one you want for 2026, start the conversation now. A return that has to be finished and paid in the last week of February cannot begin in the third week of February.
This article is general information about federal and Texas tax rules as they stood on November 5, 2026. It is not advice for your situation, and tax rules change. Talk to a CPA about the facts of your own operation before acting on anything here.
