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Department of the Treasury
Internal Revenue Service
2024 Instructions for Schedule J
Use Schedule J (Form 1040) to elect to figure your 2024 income tax by averaging,
Income over the previous 3 years (base years), all or part of your 2024 taxable income from
your trade or business of farming or fishing. This election may give you a lower tax if
Averaging for your 2024 income from farming or fishing is high and your taxable income for 1 or
more of the 3 prior years was low.
Individuals With In order to qualify for this election, you aren't required to have been in the business
of farming or fishing during any of the base years.
Income from You may elect to average farming or fishing income even if your filing status wasn't
the same in the election year and the base years.
Farming or
This election doesn't apply when figuring your alternative minimum tax on Form
6251. Also, you don't have to refigure, because of this election, the tax liability of any
Fishing
minor child who was required to use your tax rates in the prior years.
Section references are to the Internal Keep a copy of your 2024 income tax • Contract harvesting of an agricul-
Revenue Code unless otherwise noted. return to use for income averaging in tural or horticultural commodity grown
2025, 2026, or 2027. or raised by someone else, or
Future Developments Note. For tax years beginning in • Merely buying or reselling plants
or animals grown or raised by someone
For the latest information about devel- 2022, the filing status “Qualifying wid-
else.
opments related to Schedule J (Form ow(er)” is called “Qualifying surviving
1040) and its instructions, such as legis- spouse.” The rules for the filing status
lation enacted after they were published, have not changed. The same rules that Fishing business. A fishing business is
go to IRS.gov/ScheduleJ. applied for Qualifying widow(er) apply the trade or business of fishing in which
to Qualifying surviving spouse. We will the fish harvested, either in whole or in
What’s New match the term to the year of use part, are intended to enter commerce or
Schedule J (Form 1040) title changed. throughout these instructions. enter commerce through sale, barter, or
trade. This includes:
The title for Schedule J (Form 1040) Definitions
was changed from “Income Averaging 1. The catching, taking, or harvest-
For Farmers and Fishermen” to “Income Farming business. A farming business ing of fish;
Averaging for Individuals With Income is the trade or business of cultivating 2. The attempted catching, taking,
from Farming or Fishing.” land or raising or harvesting any agricul- or harvesting of fish;
tural or horticultural commodity. This 3. Any other activity that can rea-
includes:
General sonably be expected to result in the
1. Operating a nursery or sod farm; catching, taking, or harvesting of fish;
Instructions
2. Raising or harvesting of trees 4. Any operations at sea in support
bearing fruits, nuts, or other crops; of, or in preparation for, any activity de-
Prior Year Tax Returns scribed in (1) through (3) above;
3. Raising ornamental trees (but not
You may need copies of your original or evergreen trees that are more than 6 5. Leasing a fishing vessel, but only
amended income tax returns for 2021, years old when severed from the roots); if the lease payments are (a) based on a
2022, and 2023 to figure your tax on share of the catch (or a share of the pro-
Schedule J. 4. Raising, shearing, feeding, caring
for, training, and managing animals; and ceeds from the sale of the catch) from
the lessee's use of the vessel in a fishing
If you need copies of your tax re- 5. Leasing land to a tenant engaged
business (not a fixed payment), and (b)
turns, use Form 4506. There is a fee for in a farming business, but only if the
determined under a written lease entered
each return requested. See Form 4506 lease payments are (a) based on a share
into before the lessee begins any signifi-
for the fee amount. If your main home, of the tenant's production (not a fixed
cant fishing activities resulting in the
principal place of business, or tax re- amount), and (b) determined under a
catch; and
cords are located in a federally declared written agreement entered into before
disaster area, this fee will be waived. If the tenant begins significant activities on 6. Compensation as a crew member
you want a free transcript of your tax re- the land. on a vessel engaged in a fishing busi-
turn or account, use Form 4506-T. See ness, but only if the compensation is
the Instructions for Form 1040 to find A farming business doesn't include: based on a share of the catch (or a share
out how to get these forms.
SepCat. No. 25514J J-1 25, 2024
