Does Owning Cattle Affect My Railroad Retirement?

Welcome to another edition of the Highball Advisors Railroad Retirement Mailbag! I'm John McNamara with Highball Advisors here in Jacksonville, Florida, at the Florida East Coast Railway. Today’s question comes from Claud M., who asks: “What if I have cattle and sell some every year? There won’t be a W2, but I still report the income on my tax return. Will the work deduction apply in this case?”

Great question, Claud. Here’s the deal: if you’re collecting your annuity and have additional income from cattle sales, that’s considered investment income, not earned income. While it’s great business, especially with meat prices right now, the income from cattle sales wouldn’t qualify for work deductions. Work deductions typically apply to earned income from W2 jobs, but not to pensions, annuities, or investment income like cattle sales or interest.

For more details, check out my video on "Should I Work in Railroad Retirement?" where I cover these types of situations in-depth.

I hope you found this video helpful! Keep sending in your questions, and I’ll make sure to answer them in future videos. Until next time, everyone, stay safe, stay on track, and take care. So long!

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Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. Highball Advisors encourages you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Highball Advisors, and all rights are reserved from Highball Advisors, and all rights are reserved.