Below, you'll find information about generating Schedule J, Income Averaging For Farmers and Fishermen, in Lacerte.
Use Schedule J (Form 1040) to elect to figure the current year's income tax by averaging, over the previous 3 years (base years), all or part of this year's taxable income from farming or fishing. This may give a lower tax if this year's farming or fishing income is high, and taxable income for one or more of the base years was low.
Before you start:
- This election is possible even if the taxpayer didn't engage in farming or fishing during any of the base years.
- This election is possible even if the taxpayer's filing status was different in the base years.
- This election doesn't apply when figuring alternative minimum tax (Form 6251).
- This election doesn't require recomputation of returns of minor children who used the taxpayer's tax rates in the base years.
To generate Schedule J in the program:
- Go to Screen 45.3, Income Averaging for Farmers and Fisherman.
- Enter any applicable fields.