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Department of the Treasury
Internal Revenue Service
2023 Instructions for Schedule J
Use Schedule J (Form 1040) to elect to figure your 2023 income tax by averaging,
Income over the previous 3 years (base years), all or part of your 2023 taxable income from
your trade or business of farming or fishing. This election may give you a lower tax if
Averaging for your 2023 income from farming or fishing is high and your taxable income for 1 or
more of the 3 prior years was low.
Farmers and 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.
Fishermen 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.
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
minor child who was required to use your tax rates in the prior years.
Section references are to the Internal applied for Qualifying widow(er) apply the fish harvested, either in whole or in
Revenue Code unless otherwise noted. to Qualifying surviving spouse. We will part, are intended to enter commerce or
match the term to the year of use enter commerce through sale, barter, or
Future Developments throughout these instructions. trade. This includes:
For the latest information about devel- Definitions 1. The catching, taking, or harvest-
opments related to Schedule J (Form ing of fish;
1040) and its instructions, such as legis- Farming business. A farming business 2. The attempted catching, taking,
lation enacted after they were published, is the trade or business of cultivating or harvesting of fish;
go to IRS.gov/ScheduleJ. land or raising or harvesting any agricul- 3. Any other activity that can rea-
tural or horticultural commodity. This sonably be expected to result in the
includes:
General catching, taking, or harvesting of fish;
1. Operating a nursery or sod farm;
Instructions 4. Any operations at sea in support
2. Raising or harvesting of trees of, or in preparation for, any activity de-
bearing fruits, nuts, or other crops; scribed in (1) through (3) above;
Prior Year Tax Returns
3. Raising ornamental trees (but not 5. Leasing a fishing vessel, but only
You may need copies of your original or evergreen trees that are more than 6 if the lease payments are (a) based on a
amended income tax returns for 2020, years old when severed from the roots); share of the catch (or a share of the pro-
2021, and 2022 to figure your tax on
Schedule J. 4. Raising, shearing, feeding, caring ceeds from the sale of the catch) from
for, training, and managing animals; and the lessee's use of the vessel in a fishing
If you need copies of your tax re- business (not a fixed payment), and (b)
5. Leasing land to a tenant engaged
turns, use Form 4506. There is a fee for determined under a written lease entered
in a farming business, but only if the
each return requested. See Form 4506 into before the lessee begins any signifi-
lease payments are (a) based on a share
for the fee amount. If your main home, cant fishing activities resulting in the
of the tenant's production (not a fixed
principal place of business, or tax re- catch; and
amount), and (b) determined under a
cords are located in a federally declared 6. Compensation as a crew member
written agreement entered into before
disaster area, this fee will be waived. If on a vessel engaged in a fishing busi-
the tenant begins significant activities on
you want a free transcript of your tax re- ness, but only if the compensation is
the land.
turn or account, use Form 4506-T. See based on a share of the catch (or a share
the Instructions for Form 1040 to find A farming business doesn't include: of the proceeds from the sale of the
out how to get these forms. • Contract harvesting of an agricul- catch).
Keep a copy of your 2023 income tax tural or horticultural commodity grown
return to use for income averaging in or raised by someone else, or The word “fish” means finfish, mol-
2024, 2025, or 2026. • Merely buying or reselling plants lusks, crustaceans, and all other forms of
or animals grown or raised by someone marine animal and plant life other than
Note. For tax years beginning in else. marine mammals and birds.
2022, the filing status “Qualifying wid- A fishing business doesn't include
ow(er)” is called “Qualifying surviving any scientific research activity conduc-
spouse.” The rules for the filing status Fishing business. A fishing business is
have not changed. The same rules that the trade or business of fishing in which ted by a scientific research vessel.
J-1
Sep 28, 2023 Cat. No. 25514J
