Deduct Everything!
Save Money with Hundreds of Legal Tax Breaks, Credits, Write-Offs, and Loopholes
EVA ROSENBERG, EA
Humanix Books
Deduct Everything
Copyright © 2016 by Eva Rosenberg
All rights reserved
Humanix Books, P.O. Box 20989, West Palm Beach, FL 33416, USA
www.humanixbooks.com | [email protected]
Library of Congress Cataloging-in-Publication Data
Names: Rosenberg, Eva, author.
Title: Deduct everything: save money with hundreds of legal tax breaks, credits, write-offs, and loopholes / Eva Rosenberg.
Description: Boca Raton, Florida: Humanix Books, 2016.
Identifiers: LCCN 2015047996 (print) | LCCN 2015049893 (ebook) | ISBN 9781630060473 (paperback) | ISBN 9781630060480 (Paperback)
Subjects: LCSH: Finance, Personal. | BISAC: BUSINESS & ECONOMICS / Personal Finance / Money Management. | BUSINESS & ECONOMICS / Small Business. |BUSINESS & ECONOMICS / Taxation / Small Business.
Classification: LCC HG179 .R674 2016 (print) | LCC HG179 (ebook) | DDC 343.7305/23—dc23
LC record available at http://lccn.loc.gov/2015047996
No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any other information storage and retrieval system, without written permission from the publisher.
Interior Design: Scribe
Humanix Books is a division of Humanix Publishing, LLC. Its trademark, consisting of the words “Humanix” is registered in the Patent and Trademark Office and in other countries.
Disclaimer: The information presented in this book is meant to be used for general resource purposes only; it is not intended as specific financial advice for any individual and should not substitute financial advice from a finance professional.
ISBN: 978-1-63006-047-3 (Paperback)
ISBN: 978-1-63006-048-0 (E-book)
Contents
1. Introduction
2. Record-Keeping Tips and Tools That Help Maximize Deductions
3. Should You Prepare Your Own Tax Return?
4. Choosing a Tax Professional
5. Deductions around the House
6. Giving Yourself Credits around the House
7. Extra Income around the House
8. In the Garage
9. Deduct Your Medical Expenses and Get Some Money Back
10. Charity Deductions Begin at Home
11. Retirement Tax Issues for the Young at Heart
12. Long-Term Savings and Retirement Tax Issues for the Very Young
13. Tax Savings for Education
14. Tax No-No’s
15. Adjusting or Itemizing—What’s the Difference?
A Few Last Words
Glossary
Resources
Introduction
FOR MORE THAN A decade, I have been known as the “TaxMama®”—the “Dear Abby” of the tax world—fielding questions from Americans and visa holders the world over through my website, www.TaxMama.com. It’s been a lot of fun. The questions people ask, the glimpses into people’s lives, their ideas and perspectives are fascinating. I am privileged to be trusted with such intimate details. Some people have been part of TaxMama’s family from the beginning. And some pitch in and help out, providing insights and tips from their own rich store of knowledge.
The fact is the Internal Revenue Code (IRC) is bloated. According to Nina Olson, your National Taxpayer Advocate, by 2012, the IRC had grown beyond four million words—more than double the size of the IRC in 2001. Imagine how much it’s grown in the last three or four years! In fact, just as we were about to publish this book, Congress passed the “Protecting Americans from Tax Hikes Act of 2015” on December 18, 2015. That gave us time to make notes about the last-minute changes before we went to press. See Bonus Tip #270 for more details.
Absolutely no one can be expected to know everything in the Tax Code. Not you, not your tax professional (or tax expert), not the IRS—no one. We’ve all heard the phrase, “Ignorance of the law is no excuse.” So what’s the secret to getting it right?
TaxMama’s Secret is R & R—Reliable sources and Research. We know who to ask. We know where to look.
My goal is to teach you those two things: who to ask and where to look for accurate answers.
I want the tax process to be a fun experience for you, one that challenges you to use your wits to dream up your own ideas on how to “beat the system.” Legally, of course! Sometimes your far-fetched ideas might actually turn out to be the perfect solution. (In fact, I won my Dow Jones column by trying to sell a far-fetched idea a reader had sent me—an idea that turned out to actually work! More about that in “A Few Last Words.”)
Along the way, you’ll get tips, ideas, and strategies that you can implement immediately.
We’ll try to make the book as user friendly as possible, with a Resources section that will take you directly to the information you need.
First, I want to offer you my hard-won insights and truisms to help guide you throughout your tax journey.
TaxMama’s Tax Truisms
Philosophy about taxes: Lower taxes, achieved ethically = higher profits and increased joy.
Mantra about tax return records: Document, document, document! In other words, get a backup for everything!
Philosophy about people in general: There’s never a bad time to be nice to someone. There’s never a bad time to say something nice to someone. In fact, say or write something nice to someone right now!
Philosophy about dealing with IRS and state officials: Always be gracious and polite to IRS, state, and other tax officials. They can either help you or do you great harm. While it’s illegal to give gifts to government officials, you are welcome to write a letter of commendation to thank them for helping you. Send it to them with a copy for their superiors. These letters go into the employee’s file and help with promotions, commendations, and other advancements. Besides, it always feels good to get a compliment.
Philosophy about getting even: What’s the best way to get even with someone who is really mean and nasty? Smile and be super nice to them at all times. It will totally confound them.
Philosophy about burnout: Sometimes, even when you love doing something, too much of a good thing becomes a burden. Take a break.
Philosophy about tax filing when you think