Updated November 7, 2026. Quick answer: Lines 16 to 21b cover feed, fertilizer, freight, fuel, insurance and interest. The only ones with real rules are prepaid feed (three tests to deduct it when paid), freight on livestock you hold for resale, farm insurance (not health insurance or self-insurance reserves) and interest, which you allocate by how the loan money was used.
Line 16: feed
Cash-method farmers can prepay feed only if three things are true: “The payment was for the purchase of feed rather than a deposit.” “The prepayment had a business purpose and wasn’t made merely to avoid tax.” “Deducting the prepayment won’t materially distort your income.” If all three apply, the prepayment is deductible when paid, “subject to the overall limit for prepaid farm supplies”, covered on the rules before line 10. Otherwise “you can deduct the prepaid feed only in the year it’s consumed.”
Lines 17 and 19: fertilizers and lime, gasoline, fuel and oil
The Instructions give no separate rule for these two lines. They are ordinary farm expenses, subject to the general Part II rules.
Line 18: freight and trucking
One boundary: “Don’t include the cost of transportation incurred in purchasing livestock held for resale as freight paid. Instead, add these costs to the cost of the livestock.”
Line 20: insurance other than health
Line 20: “Deduct on this line premiums paid for farm business insurance.” Health coverage for employees goes elsewhere: “Deduct on line 15 amounts paid for employee accident and health insurance.” Two things are not deductible: “Amounts credited to a reserve for self-insurance or premiums paid for a policy that pays for your lost earnings due to sickness or disability aren’t deductible.”
Lines 21a and 21b: interest
Interest is sorted by purpose: “In most cases, you allocate interest expense by tracing how the proceeds of the loan are used.” The split between the two lines: “If you are not required to limit your business interest expense and if you have a mortgage on real property used in your farming business (other than your main home), enter on line 21a the interest you paid for 2025 to banks or other financial institutions for which you received a Form 1098 (or similar statement).” “If you didn’t receive a Form 1098, enter the interest on line 21b.”
Timing and limits: “Don’t deduct interest you prepaid in 2025 for later years; include only the part that applies to 2025.” The business interest limit is noted as “The business interest expense in your farming activity may be limited.” The form for it is covered on Form 8990.
Edition
This page reads Schedule F (Form 1040) for 2025 and the Instructions for Schedule F (Form 1040) (2025), the files irs.gov served on 2026-11-07. Line numbers belong to that edition, so check the label printed on the schedule in your own copy before you follow a line reference.
Common mistakes
- Deducting a feed prepayment that was really a deposit. The first test requires a purchase of feed.
- Putting transportation for livestock you bought to resell on line 18. It is added to the cost of the livestock.
- Deducting a self-insurance reserve as insurance on line 20.
- Entering mortgage interest on line 21b when you received a Form 1098 for it. With a Form 1098 the interest is a line 21a item.
Related: Schedule F overview, Form 8990, and Schedule C lines 16a and 16b.
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Answer againSources
- Schedule F (Form 1040), Profit or Loss From Farming (2025): https://www.irs.gov/pub/irs-pdf/f1040sf.pdf
- Instructions for Schedule F (Form 1040) (2025): https://www.irs.gov/pub/irs-pdf/i1040sf.pdf
Read from the IRS documents linked above on November 7, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.