Well, tax day is just around the corner (tomorrow!) and so, if you haven't done your taxes yet, here are a few friendly tips from The Boring Things in Life:
Q: "I work a part-time job at McDonald's and give 10% of my monthly income to charity. Where do I put those charitable donations?"
A: You don't. You work part-time at McDonald's. Your standard deduction is larger than any itemized deduction you could come up with, I guarantee it."
Q: "I want to get my taxes done at the H&R Block in Wal-Mart, is that a reliable service?"
A: The "experts" at H&R Block in Wal-Mart have studied taxes for about as long as you have. They are hired en masse in time for tax season. Don't waste your money.
Q: "I bought a case of Baconnaise in early 2008 for $120. Can I deduct this as a business asset that reduces in value?"
A: The value of Baconnaise unfortunately drops from $6/bottle to $0/bottle as soon as you've tasted it. Sounds like a one-time $120 business deduction to me!
Q: "I have a home-based business where I copy DVDs from Blockbuster and sell them to students on my dorm floor at a profit. Can I deduct the DVD rentals and DVD-R costs as business expenses?"
A: It is advisable to keep this business as hush-hush as possible: sending a list of your illegal business expenses to the IRS does not qualify as hush-hush.
Q: "I owe several thousand dollars in back taxes. It wasn't my fault though, I just couldn't figure out how to calculate my taxes and, as a millionaire, I cannot afford a decent accountant. What should I do?"
A: Congratulations! You may qualify for a spot on President Obama's cabinet! Please send your resume to: The White House, c/o President Barack Obama, 1600 Pennsylvania Ave NW, Washington, D.C. 20500.
3 comments:
Mr. Pringle (non-M.B.A. non-C.B.A.)
I am a teacher. I spent about $30 on Kleenex, notebook paper, and pens for my classroom in September. I said on my taxes that as a teacher, I spent about $150 on classroom expenses.
Can you explain this to me?
Mr. Pinneo,
As an almost totally-unqualified tax expert, I should inform you that what you have done is most commonly known as "undetectable tax fraud." Assuming you have not brought this question to an IRS or other Federal law-enforcement agent, your deduction of $150 is perfectly acceptable, and, as you may know, carries a $120 advantage over what we would call the "factual deduction."
My only question to you would be: why did you only deduct $150? Assuming that you have not kept receipts, why did you not say that you spent $250 on classroom supplies? This would have been a much better deduction on your taxes than $150, and still falls under "small enough not to investigate" status.
I believe it is IRS code 23.A.895 which states "Play it safe."
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