It's Income Tax Time Again...
"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands."
-- Judge Learned Hand
"Be wary of strong drink. It can make you shoot at tax collectors... and miss."
--Lazarus Long in Time Enough for Love
It's that time of year again. Time for Uncle Sam's tax collectors to start squinting at tax forms again. Time for the annual dance between the tax code and our desire to keep as much of our money as possible.
You know the drill. "If I take that deduction, will it trigger the audit flags? If I don't take it, how much will it cost me?"
The easy answer is, according to former IRS trainer Sanford Botkin, "if you can document a tax deduction, take it."
According to Robert Bruss in an article published at
http://houseandhome.msn.com/Financing/10CommonlyMissedTaxDeductionsforHomeowners.aspx
here are 10 tax deductions homeowners commonly miss:
1. If you bought a home, deduct your principal residence mortgage acquisition loan fee.
2. Deduct home mortgage refinance fees over the life of the mortgage.
3. If you changed job location and residence location in 2004, your moving costs may be tax deductible.
4. Deduct any home mortgage prepayment penalty paid.
5. Deduct undeducted loan fees from a prior home loan refinance.
6. Deduct prorated mortgage interest share in the year of home sale or purchase.
7. Deduct your share of prorated property taxes if you bought or sold your home.
8. Deduct prepaid mortgage interest and property taxes.
9. Deduct and double-check property taxes paid from your escrow impound account.
10. Deduct ground rent payments if your home is on leased land.
The bottom line is, you have a moral obligation to pay every penny you owe in taxes, and not one penny more. Most of us have the "pay" part conditioned in from the first time we get a pay check. I know I looked at the stub, and I wondered who this FICA guy was and why he was getting so much of my check. If you're struggling with the "not one penny more" part, heed Botkin's advice-- if you can document the deduction, take it.
These books will help you find every tax deduction you're entitled to.
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