Strange (But Real) Deductions

[tdrshopping]

Strange (But Real) Deductions

According to recent analysis of IRS tax data, women are less likely than men to take advantage of tax benefits and use advanced tax-planning tools. As a result, in addition to the money you’re giving to religious organizations and charities, every April you’re donating money to the government.

It’s time to give yourself a bailout. Network to find a competent accountant or, if you have the time, check out some of the excellent tax preparation and planning software that’s available. In the meantime, here are some suggestions for deductions, credits, and strategies that you may be overlooking.

Deduct what you donate. This seems like a no-brainer, but many women don’t do it. Our tendency is to give without any expectation of benefit (what a concept!), while men tend to seek something in return. No matter how admirable this quality may be, it’s costly. Ask for receipts at Goodwill when you donate clothing. Track mileage logged on behalf of a charity. Even babysitting fees are deductible if you use the resulting free time for charitable work.

Write off learning. The Lifetime Learning Credit entitles any taxpayer who is taking classes—for a degree or not—to a tax credit of 20% on the first $10,000 of expenses each year.

Get paid to lose weight. If you’ve been diagnosed with a specific disease that requires you to lose weight or improve/maintain fitness, support group membership fees and counseling sessions may be deductible—if prescribed by your doctor.

Credit the move. If you changed jobs recently, you may be able to deduct moving expenses. To qualify, the new job has to be at least 50 miles farther away, and you must have worked full time in that new position for 39 weeks. The cost of relocating your pet may even be covered.

Pad your house (and wallet). If you plan to upgrade to more energy-efficient windows, insulation, doors, roof, or heating and cooling equipment this year, you can receive a tax credit of up to $500.

Expense your expenses. If you are self-employed, any legitimate costs in operating the business and/or working with clients are deductible. Believe it or not, an exotic dancer once legitimately wrote off breast implants as an investment.

Schedule a late audit. Finally, if you’re a bit too creative with your 1040 and the result is a kindly letter from your friends at the IRS, try to schedule your audit meeting as late in the day on Friday as possible. An auditor’s human. Provided he has a real life, he won’t stay past 5 to nitpick.

Check with a tax professional to answer any questions about your specific situation.

Source: Vocalpoint 2/24/09