Wednesday, August 1, 2007

Squeeze the IRS For Every Dime They’ve Got

Author: Nick
Category: Money
Topics:

this dime has been squeezed out of the IRS

By L. Shepherd

Tax time can scare the crap out of anyone, but for me, it’s usually fun to see how much I’m going to be investing in my wardrobe. Why? Every year, without fail, I get a big fat check from the government. And while that’s true for a lot of people, the real kicker here is that I’m self employed. I’m a freelance writer making a modest living and paying zero income tax over the course of the year. Every time I get paid, there’s no employer to withhold or to pay half the FICA.

If you’re self-employed, the general consensus is that at tax time, you’re screwed. But that never has to happen, you know, unless you’re into that. The real responsibility you have at tax time is to take every possible deduction you can in order to squeeze the IRS. Not only can you not pay taxes, but you can get them to pay you.

This can’t happen if you look around in early April and wonder how many deductions you can come up with. It is a steady process throughout the year that builds to a steamy climax of cash. The easiest way to do this is to donate regularly. I see waaaay too many people that simply throw away crap that can be donated. Old books you now hate, outgrown kids clothes, the coat that looked cool in the store but now makes you look like your grandma–all are deductions waiting to happen. The standard deduction for donations is one fourth of the original value. So, just one bag of mid-range clothing can easily net you over a hundred bucks in donations. Carry that over to friends and family, who will likely thank you for carting off the stuff they don’t want anymore, and you’re in business.

Scour the house for stuff that irritates you. Declutter and get rid of it all. Hate your dog? Well, you can’t get a deduction for donating your dog, but you can for adopting a new one from the Humane Society. Buy items that are deductible, such as items from charity shops, and donate anything you want to get rid of.

Donating most items and getting the deduction is usually equal to or only slightly less than the amount you would make by selling the items on eBay, and you haven’t wasted two hours trying to photograph a metal candlestick without getting a glare. And I know what you’re thinking–eventually the stuff runs out and there are no more deductions to be had. On the contrary–your junk actually breeds, laying eggs that you will only find after you’ve made a few runs to the thrift store. No matter how much stuff I donate, there is always more stuff. Always. I don’t understand the physics behind junk regeneration, but I do know that it’s real and that it happens to us all.

To ensure you have a deduction, make sure your item is in decent condition. Clean older items and check clothing for stains. New IRS rules say that you can’t donate trash and get a deduction and that everything has to be in usable condition. I always take a picture of my stuff outside the thrift store doors as proof just in case the IRS ever wants to know if I really had that much crap. I assure you, I did. And so do you.

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L. Shepherd is a freelance writer and has been self-employed for six years. You can contact L. Shepherd at http://thewritersite.com.

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