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May 26, 2005
FEFO 05-10

FARM AND FAMILY LIVING INCOME AND EXPENSES FOR 2004

In 2004 the total, noncapital, living expenses of 1,225 farm families enrolled in the Illinois Farm Business Farm Management Association (FBFM) averaged $52,589--or $4,382 a month for each family (Table 1). This average was 9.2 percent higher than 2003 and 18.2 percent higher than in 2002. Another $5,960 was used to buy capital items such as the personal share of the family automobile, furniture, and household equipment. Thus, the grand total for living expenses averaged $58,549 for 2004 compared with $52,908 for 2003, or a $5,641 increase per family. The average amount spent per family for capital items was $1,211 more, while noncapital expenses increased $4,430 per family. The sample farms, which were mainly grain farms, were located primarily in central and northern Illinois.

Income and Social Security Taxes Paid

Income and social security tax payments increased in 2004 compared to the year before. The amount of income taxes paid in 2004 averaged $8,208 compared to $7,571 in 2003. The amount of income taxes paid was at its second lowest level since 1989. Medical expenses were higher in 2004 compared to 2003. In 2004, medical expenses averaged $7,320. This is the first year medical expenses averaged over $7,000. Medical expenses include out-of-pocket costs for health insurance along with doctor and hospital expenses.

In the table, the averages per farm for total family living expenses are divided into five categories for 2001 through 2004. The "expendables" category includes cash spent for food, operating expenses, clothing, personal items, recreation, entertainment, education, and transportation. This category also includes selected itemized deductions such as the personal share of real estate taxes. Cash spent for capital improvements exceeding $250 is not included. The use of a rented house on an estimated 40 to 50 percent of the farms in this sample is not included, since these data cover only cash outlays.
The author would like to acknowledge that data used in this study comes from the local Farm Business Farm Management (FBFM) Associations across the State of Illinois. Without their cooperation, information as comprehensive and accurate as this would not be available for educational purposes. FBFM, which consists of 6,000 plus farmers and 60 professional field staff, is a not-for-profit organization available to all farm operators in Illinois. FBFM field staff

provide on-farm counsel with computerized recordkeeping, farm financial management, business entity planning and income tax management. For more information, please contact the State FBFM Office located at the University of Illinois Department of Agricultural and Consumer Economics at 217-333-5511 or visit the FBFM website at www.fbfm.org.


Issued by: Dale Lattz, Department of Agricultural and Consumer Economics



  

Department of Agricultural and Consumer Economics    College of Agricultural, Consumer and Environmental Sciences
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