Belle Fourche Personal Tax Preparation

Household Returns in Butte County

Belle Fourche households rarely have just one W-2. A mill operator's spouse might run a few head of cattle, a retired couple might lease grazing land to a neighbour, and a young family might have one paycheque from Spearfish and another from a job site in Montana. South Dakota does not tax personal income, so most residents file only a federal return, but the details of ranch income, royalties and out-of-state work decide whether that return is right. BOMCAS prepares personal returns for Belle Fourche residents remotely.

The federal basics and residency rules are on South Dakota personal tax preparation; below we cover ranch income, mineral royalties and jobs across the state line from Belle Fourche.

Small Ranches and Hobby Operations

Many families keep a small herd, a few horses or some hay ground alongside town jobs. If the operation is run to make a profit, income and expenses go on Schedule F and losses can offset wages. If it is closer to a hobby, the income is taxable but the expenses are generally not deductible. Keeping records, a business plan and separate accounts helps show a profit motive.

Grazing Leases and Royalties

Landowners who rent pasture to a neighbour usually report it as rental income rather than farm income, unless they take part in the operation. Owners of land with bentonite or other minerals may receive lease bonuses and royalties, reported on Schedule E with a depletion deduction. A 1099 from the mining company is a starting point, but we check it against the lease.

Working Across the State Line

Residents who commute west to Wyoming owe no state income tax there. Those who take jobs in Montana, whether on a pipeline, a ranch or a construction crew, generally must file a Montana nonresident return reporting the Montana wages. If the employer withheld for the wrong state, we file to get it back.

Rodeo Contestants

Competitors at the Black Hills Roundup and other rodeos report prize money as income. Those who compete regularly to make a profit can deduct entry fees, travel, horse costs and equipment on Schedule C, and owe self-employment tax on the net.

Retirees

Retirees here pay no state tax on pensions, Social Security or IRA withdrawals. We help with required minimum distributions, Social Security taxation and qualified charitable distributions.

Credits for Families

The child tax credit, the earned income credit for lower-income workers and the child and dependent care credit can all apply. Parents paying for college at Black Hills State or elsewhere should look at the American opportunity credit.

What to Bring

W-2s, including any from Montana or Wyoming employers.
1099s for royalties, leases and contract work.
Sale barn and livestock records.
Rodeo winnings and expenses.
Pension, Social Security and IRA statements.
Last year's return.

Getting Started

Send your documents, and we will review them, ask any questions in one message and explain the return before it is filed.

Selling Cattle or Land

Retired ranchers selling the last of a herd report raised breeding animals held long enough as section 1231 gain, which is taxed at capital gain rates and is not subject to self-employment tax. Selling a parcel near town, or the home place, raises questions about the home sale exclusion, which covers only the house and a reasonable amount of surrounding land. Planning the year of a large sale can keep income out of higher brackets.

Commuting to Spearfish

Many Belle Fourche residents work at the hospital, the university or businesses in Spearfish. Commuting costs are not deductible for employees, but those who are self-employed and travel between work sites can deduct business mileage.

Selling a horse, trailer or saddle at a loss is generally not deductible unless it was used in a business.