Deductions for Deviants and Dummies

[digitaldiscipline]

Deductions for Deviants and Dummies

I’m going to assume you’ve already entered the formal information that appears on your tax forms: W-2’s (wages), 1099 (interest & dividends), 1098 (mortgage), and so forth.

The trick, as any shady accountant will tell you, is turning expenses into deductions. There are almost certainly more out there, but I’m lazy, and these are easy enough that even the basic online tax engines (such as H&R Block, Turbotax, and their ilk) will probably prompt you for them if you know where to look and how to frame your financial picture.

There are three major loopholes average schmucks like us can exploit to avoid paying too much for our year’s supply of gubmint.

Travel

Most of us have a touch of wanderlust – we go to Convergence, for instance – or we wend our way around the country to see friends and/or family at some time or other. But you know what else you’re doing while you’re checking out so-and-so’s outfit and bitching about your day job? You’re “looking for work.” That’s right, my friends, the fine art of social networking among your peer group can be rationalized as an attempt to further your professional career.

And, because your current employer sure ain’t footing the bill, you can write off 100% of airfare, tolls, and parking (and 50% of hotel rooms, food, and entertainment costs) as “unreimbursed business expenses incurred.” Yes, Swarmy, strippers can be a deduction if you go out of town to ogle ‘em. Now stop dancing like that.

If you drive, rather than trust a pilot or conductor to convey you, mileage allowances are also available, even if you use your car for non-business purposes.

Hobbies

Now that you’ve pored over the last year’s credit card statements to look at all the money you blew on airfare, hotels, and lap dances, you’re probably beginning to fret on how much jack you dropped on silly shit (yes, Sil, this includes your Mission addiction and the Fizzies ;-) . . . it also covers my cravings for computer parts). But, never fear. . . if you spent more than a certain percent of your Adjusted Gross Income (your tax software or handy-dandy incomplete 1040EZ will have this figure) on pursuits that can be arguably considered hobbies, you can deduct them. Video games, home theater stuff. . . if you waste a lot of time and money on it, it’s gotta be a hobby, right? You wouldn’t do that kind of thing out of necessity, would you? ;-)

Drop a ton of cash on home improvement? You’re into restoration! The same sort of tenuous rationalization that got you that low score on the Purity Test is your friend here, too. Don’t go nuts, but most of us have one or two things we spend a silly amount of money on.

Tithes & Donations

As with hobbies, a lot of us worship at the altar of Bacchus, who doesn’t necessarily just hold services on Sunday. *chuckle* Or we offer sacrifice to the gods of gigahertz. With the tsunami and all the hurricanes last year, or the myriad different charitable causes that a lot of folks participate in (or ask for sponsorship for doing), it’s surprising how those things add up. For single donations less than $500, you won’t even need a receipt.

Moving

A bunch of us picked up stakes and moved last year. Repeat after me: “unreimbursed business relocation expense.” Truck rental, storage fees, gas, lodging, mileage on your car. . . all of it can be deducted. The caveat here is that you had to move because your old home was more than 50 miles from your new place of employment.

Tax Prep Fees

That’s right – whatever you paid last year to whomever you suckered into doing your taxes, you get to deduct it this time around. Me? My time’s worth about fifty to a hundred bucks, plus whatever H&R Block puts on my credit card.

If anyone feels like actually paying for my half-assed advice, I take Pay-Pal . . . and it’s all tax-deductible for you next year. ;-)

[Ob. Disclaimer: I'm not a tax or accounting professional. Don't get yourself audited by being too greedy. I owe a debt to the advice of axissilverhand a couple years back for showing me some of this light.]

Comments

[angel-renewed.livejournal.com]

About time the damn fizzies started doing something for ME! Did I mention we now have chairs? The front room is almost respectable, if still home to a barren 125.

[webmd.livejournal.com]

Really, no receipts for single donations less than $500? Love the "Bacchus" thing. :-)

[etcet.livejournal.com]

That's correct. So if you took $400 worth of clothes to the Salvation Army, and gave $300 to the Red Cross for disaster relief, even though that totals more than $500, you would most likely not be challenged for a receipt (though a copy of the check you wrote and a list of what you donated, even if it's your own, would certainly not hurt).

[kungfugimp.livejournal.com]

I wonder if I can consider my hearse a hobby - I've spent buttloads on getting the engine redone and the bodywork and paintjob. It does all add up. It's not going to be a daily driver per se - but more like an enthusiast thing.

[etcet.livejournal.com]

"vintage (or custom) auto restoration" sounds hobbyish to me. . .

[trystbat.livejournal.com]

The 'hobbies' one I don't trust, but I'm a paranoid type (thanks to too many drugs back in the '60s). This year, I'm working the 'business expense' angle, thanks to ttrealtravels.com. Also, on the tax prep fees, that includes the cost of any software bought for tax prep purposes, a la TurboTax, plus e-filing fees (where applicable).

[etcet.livejournal.com]

I typically only take advantage of this once (computer hardware), because that's where the most easily-documented string of purchases lives (points to stack of newegg.com packing slips). With as much as I spent on the house as far as redecorating, it could have outstripped the geekery in raw dollars, but nobody would believe that a new dryer was a hobby purchase, even if i overclocked it. *grin*

[delicarose.livejournal.com]

The same sort of tenuous rationalization that got you that low score on the Purity Test is your friend here, too.

Naw.. I really did score that low.

*hides face*

[etcet.livejournal.com]

I could suggest places to hide it, but I don't think that'd lower your score at this point. *laugh*

[ex-xn667.livejournal.com]

Man, if I'd know about the ole hobby deduction, my box of receipts would be bigger than me. It's a bunch of tiny purchases, relatively, but it's my compulsion and it adds up wayyyyy too much. Does "collecting" constitute a hobby in and of itself, or does one have to specify specific collections?

As for an overclocked dryer, let me know when you figure that one out ;>