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Last chance tax deductions

Discussion in 'Asset Protection/Taxes/Legal' started by Allthingznew, Dec 13, 2007.

  1. Allthingznew
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    Allthingznew Contributor

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    There are about 16 days left in 2007 and I thought it might be valuable to toss out questions and ideas about last minute tax deductions. Many here have probably already had their year planned and have executed that plan, but there are many who are new and might benefit from an idea of a deduction this year.

    I projected my taxes and income for the rest of the year and calculated that I could buy a Mac for my business, with the money I had set aside to pay taxes, because with the deduction I will already have paid enough for this year.

    Any ideas on how to justify the purchase of an Ipod? :banana:
     
  2. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    First of all - make sure you have a business for these deductions.

    - Max out your Section 179 (can expense all the deductions)
    - Prepay rent, other monthly expenses

    Go through the Appendix at the back of "Loopholes of the Rich" (free book after you make 5+ posts) - there are over 300 possible business deductions there.

    Your iPod is a deduction if you can figure out how it is "ordinary" and "necessary" to the production of income in your business. Tell me more about your business...let's see if we can write if off!
     
  3. EasyMoney_in_NC
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    EasyMoney_in_NC Contributor

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    Just started my copy last night, guess where I'll be looking tonight when I get home :D

    BTW, are there any major changes since the printing of the book we should skip or know about Dianne?
     
  4. rcardin
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    rcardin Contributor

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    I can write mine off as a backup music device with my DJ business.:smxA:
     
  5. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Some of the tax percentages have changed. The real estate professional status is underfire. (Check out my blog this week for some of the new tax news on that) AMT is a big problem now - wasn't so much then.

    Other than that, it's more the basics. If you run into something and have a question, please ask it here.
     
  6. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    My iPod fits into a Bose system in my office...so it's all deductible.
     
  7. Allthingznew
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    Allthingznew Contributor

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    Yes! It was actually your book that gave me the idea to see about buying the computer. :thankyousign: I started the thread to put feet to the knowledge and hopefully others could benefit.

    Currently I have a few things in the works. I have been an independent contractor for most of my business income this year. That work has to do with making sure soap machines installed in restaurants are functioning. I have also been working on a web based b2b business.

    The ideas I've had for the ipod as a write off were limited to listening/viewing training materials. I also have written music which I have copyrighted and we have performed in my church band, although I haven't sold. I work from home so the office music system may not fly, but I like it. I'd be pleasantly surprised to be able to write one off.
     
  8. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Do you have a home office?

    (Home office is defined by the IRS as a space that is exclusive to business and in which you regularly conduct some kind of business activity)
     
  9. Allthingznew
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    Allthingznew Contributor

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    I work on my laptop in the living room. I have a spare room I could allocate space to, but truth be told not likely to actually work there. Would keep files and a desk and the like though. So, if I have to have dedicated space, I can do that. But since I pretty much work in the living room obviously it's used for personal use.

    Are you going to make me go to my room?
     
  10. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Yes! Or at least tell the IRS you did ...... and never post on a forum that you did otherwise....
     
  11. Allthingznew
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    Allthingznew Contributor

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    Ok, so I'm in my room. Does that mean I can put in a music system?
     
  12. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Absolutely :banana::banana::banana:
     
  13. M-M
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    M-M New Contributor

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    This is awesome! I've had my S-Corp for almost 2 years and it took me a little bit to get used to the idea of writing off things in relation to my business. I'm sure I missed a lot; I wouldn't have thought of the iPod. I do have a real home office though. I wonder what I could include? I'll make a list based on your book, which I got today. Thanks again!

    **Let's see if I can deduct this: As I stated in another thread, I will my two websites of mine divisions of the SC. One of these sites is a blog about my favorite soccer club, Bayern Munich, which I actively supported for 8 years, and I hope to monetize it. Can I deduct the expense for DirecTV, where I watch all the matches of the club?
     
  14. nomadjanet
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    I pod's can also be used to store data on they are like a portable hard drive so if you have a need to have portable data for your business, then you can use the Ipod. Or if you record & play back client meetings. Or if you listen to business or sales training sessions on it.
    We ordered some new equipment for our plumbing company.
     
  15. EasyMoney_in_NC
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    Okay, since you asked :) Can you please elaborate on the tax deduction (within the appendix list of 300) for "child care - requires a written plan"? Plan for what exactly and who writes it?

    Thanks Dianne
     
  16. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Go to iTunes store and look for podcasts that provide information related to your business, or just business in general (there are hundreds of podcasts available). Subscribe and listen to them regularly, you iPod is now a device used for training, indispensable for your business. I think that should work.
     
  17. tchandy
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    tchandy Contributor Read Millionaire Fastlane

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    I just bought a new laptop this month and plan to take two business trips San Antonio to look at a possible investment and Hawaii to see my property manager. Both I will add to this year's tax deductions.

    Diane, I have your book Loopholes of the Rich and may save that for the flight to Hawaii but currently reading the Maui Millionaires that I picked up from the library. Seems good so far. I was thinking that I have too many books and my wife gets on me that I have too many already so I checked out the library. :smx4:

    Tom
     
  18. Allthingznew
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    Allthingznew Contributor

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    Awesome thanks!
     
  19. Allthingznew
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    Allthingznew Contributor

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    Ok guys, I get an Ipod, what can you get before the year is up?

    And Diane, what reasons, if any, might there be to put off a purchase until January?
     
  20. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    You can set up a Child Care Plan that covers all employees of a C Corporation. It has to be a "formal plan" - ie, it's documented and says who is covered - like the type of thing you'd find in an employee manual. Check out if you can also get a flexible spending plan. An amount is deducted from your paycheck each month, pre-tax, and can be used for medical and day care (in some cases). Your medical insurance provider can tell you if they offer this option. It's often free of charge.
     
  21. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Didn't quite understand the first question...but I haven't had my coffee yet this am...

    As far as "why should I put off a purchase"

    - If you're subject to AMT this year (and 23 million more Americans are going to be if the House and the Senate don't come to an agreement real soon here), find out if the expense will work for AMT. Otherwise, you might want to take the expense in 2008, when you can get the deduction. (You lose a lot of deductions with AMT)

    - If you've maxed your Sec 179, then might want to put it off.
     

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