Creating Tax Deductions
It’s a question I’ll hear every seminar: “How can I write off _________?” It’s a great question because it’s not an easy yes/no question, like “Can I write off ______?” would be. (Easy answer on that would be “no” because then your CPA doesn’t have to think anymore!)
The answer is my standard “It depends.” But, this time I took it a step further in a recent thread on the Tax Loopholes forum. If you haven’t already gone to the forum to see what’s new for the First Class Lounge (First Class Lounge Forum), you’re going to want to visit soon.
It started when one of our community members asked how he could write off his personal car that he used for his long commute. And with rising gas prices, the commute was turning into one of his biggest expenses. With some imagination, all via the thread you can view now, he walked away with a business idea that not only will give him an immediate tax deduction but a new way to make money.
Another community member wrote in about her expensive habit - shopping! With a slight nudge,she came up with some brilliant innovations and is now excitedly looking at a possible new business for herself as well.
Where do you spend money that you’d love to take as a tax write-off? What tax loopholes can you use to make yourself even more money?
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I have a question relating to a thread on eBay's Member Workshop.
The post said:
"For this month's workshop I want to talk about the Ten Things You Must Know Before You File Your Tax Return. Unless you are planning to file for an extension (which I highly recommend!), tax time is quickly approaching, and now is the time to get prepared.
Diane Kennedy, CPA www.taxloopholes.com"
My question is regarding your comment, in parenthesis, about filing for an extension. This is the second time I've heard that filing an extension is a good thing to do, but I was also told recently that it might be a red flag for the IRS.
Would you explain why you "highly" recommend filing an extension?
Thanks so much for your help.....
That’s a great question, and actually a reminder of something I should start a thread on in the First Class Lounge forum. If you’re not yet a member, you can try it out for the first 30 days for free and cancel with no hassle anytime after that. (It’s just $9.97/month, so I’m not sure why you would want to cancel)
Quick answer: IRS auditors have a quota of # of returns to audit. The lists are given to them in segments with the first segment being all the returns filed by 4/15. It’s human psychology that we tend to fill up the quota with that batch (what we know, rather than what we don’t know).
This was recently confirmed by a new client of mine who just went through an IRS audit. He asked the agent if it was true and the agent said to always file as late as you can.