Farm Income Averaging

Course Description

This course provides a comprehensive overview of Farm Income Averaging (FIA) under IRC §1301, explaining how qualifying farmers can reduce tax liability by averaging current-year farm income across the prior three tax years. Participants will learn how to determine eligibility, calculate tax savings using Schedule J, and recognize both the advantages and limitations of the FIA election.


Overview

  • Course #: 201
  • Field of Study: Taxes (Technical) 
  • Program Level: Intermediate 
  • Prerequisites: Basic knowledge of farm taxation
  • Advance Preparation: None
  • Delivery Method: QAS Self-Study/On Demand
  • Recommended CPE/CE Credit: 2.0 hours 
  • Final Exam: 20 questions - 70% pass threshold
  • Target Audience: CPAs, Enrolled Agents, and tax professionals serving agricultural clients

Learning Objectives

By the end of this course, participants will be able to:

1. Identify the purpose and provisions of IRC §1301 governing Farm Income Averaging.
2. Determine taxpayer and income eligibility for the FIA election.
3. Apply the calculation process and filing requirements using Schedule J.
4. Evaluate potential benefits and limitations of FIA in varying income scenarios.
5. Recognize compliance, documentation, and recordkeeping obligations associated with FIA. 

Course Lessons

Course Outline

Meet Your Instructor

Penny Wade Smith EA

Penny Wade Smith is the second-generation owner of Wade Farm Financial Services of Mayfield Kentucky. She specializes in farm and entity bookkeeping and income taxes, as well as tax, estate, succession and retirement planning for farmers.

For more information on your instructor, please visit our About section.

Education Information

  • ATU Course Number: ATU-TAX-INT-SS-2025-001-v1
  • IRS Program Number: QKKWZ-T-00001-26-O
  • NASBA Registry ID Number: 170295
  • Field of Study: Taxes (NASBA); Federal Tax Topics/Federal Tax Related Matters (IRS)
  • Delivery Method: QAS Self-Study (NASBA); On-Demand (IRS)
  • Publication Date: July 2026
  • Revision/Review Date: July 2026
  • Course Developer:  Penny Wade Smith EA
  • Course Reviewer: Paul G. Neiffer CPA
  • Participants must complete the final exam within one year of purchase.