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Posts Tagged ‘Tax Deduction’

Burn It Down

October 4th, 2017

Growth is usually followed by decay; life is followed by death, and here is another case where fire follows construction. Some Taxpayers have donated their house to the fire department so that the fire department can practice their skills and burn the house down. These taxpayers have then claimed a deduction that is hotly contested by the IRS if all the following haven’t been followed.

Donate the house and the land to the fire department. This is best done by deeding the entire property over to the fire department.

Do not replace the home or have already slated it for demolition. Replacing the house disallows any charitable deduction being taken.

But, if done correctly, you can get a huge tax deduction in the amount of the fair market value of the house and land. Something to think about.

I you have questions about tax deductions, call our office at 816-524-4949 or visit our website at www.Hoorfarlaw.com.

Homeless Cats

August 28th, 2017

cats

Your local cat lady may actually not be as crazy as you think. In 2011, Jan Van Dusen beat the IRS in a case over whether she could claim a deduction for providing foster care for stray and feral cats. She was a volunteer for an approved charity called Fix Our Ferals and she spent significant amounts caring for the cats in her home.

Critical to her victory was that she performed the services in conjunction with the charity and she performed volunteer work for the charity.

The case was heralded as a victory for animal rescuers, but ultimately Van Dusen was a loser as the City of Oakland raided her home and found many of her 100 cats to be suffering from disease and parasite infestation. She was then charged and convicted for animal cruelty, so perhaps your first instinct about crazy cat ladies was correct after all.

If you or someone you know has been charged with a crime or having tax issues, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.

Dancing with the IRS

August 18th, 2017

dancing

Celebrities often use Dancing with the Stars to rehab their image, but the IRS doesn’t allow dancing as an expense to rehab your wallet at tax time. The IRS has consistently rules that taxpayers may not deduct dancing lessons as a medical expense. People have tried this for various conditions such as varicose veins, arthritis, and nervous disorders. All of these have been tried by taxpayers and denied by the IRS.

If you need some help with your taxes, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.

Tax Tips for Hobbies

August 15th, 2014

hobby 2

Many people think that income earned from a hobby does not need to be reported on your tax return. Here are four tax tips you should know about hobbies:

1. Determine if your hobby is a hobby or business. IRS publication 535 sets forth nine factors to help you determine whether your activity is a hobby or a business.

2. Hobby deductions. You can usually deduct ordinary and necessary hobby expenses as long as it is necessary and common for the activity.

3. Limits on hobby expenses. Generally you can only deduct your hobby expenses up to the amount of your hobby income. You cannot deduct a loss from your other income.

4. How to deduct hobby expenses. You must itemize deductions on your tax return in order to deduct your hobby expenses.

To contact our office, call 816-524-4949 or visit our website at www.Hoorfarlaw.com.

Seven Important Tax Facts about Medical and Dental Expenses

March 5th, 2013

If you paid for medical or dental expenses in 2012, you may be able to get a tax deduction for costs not covered by insurance. The IRS wants you to know these seven facts about claiming the medical and dental expense deduction.

1. You must itemize.  You can only claim medical and dental expenses for costs not covered by insurance if you itemize deductions on your tax return. You cannot claim medical and dental expenses if you take the standard deduction.

2. Deduction is limited.  You can deduct medical and dental expenses that are more than 7.5 percent of your adjusted gross income.

3. Expenses paid in 2012.  You can include medical and dental costs that you paid in 2012, even if you received the services in a previous year. Keep good records to show the amount that you paid.

4. Qualifying expenses.  You may include most medical or dental costs that you paid for yourself, your spouse and your dependents. Some exceptions and special rules apply. Visit IRS.gov for more details.

5. Costs to include.  You can normally claim the costs of diagnosing, treating, easing or preventing disease. The costs of prescription drugs and insulin qualify. The cost of medical, dental and some long-term care insurance also qualify.

6. Travel is included.  You may be able to claim the cost of travel to obtain medical care. That includes the cost of public transportation or an ambulance as well as tolls and parking fees. If you use your car for medical travel, you can deduct the actual costs, including gas and oil. Instead of deducting the actual costs, you can deduct the standard mileage rate for medical travel, which is 23 cents per mile for 2012.

7. No double benefit.  Funds from Health Savings Accounts or Flexible Spending Arrangements used to pay for medical or dental costs are usually tax-free. Therefore, you cannot deduct expenses paid with funds from those plans.

Courtesy of the Internal Revenue Service.