PART I: INCOME
1. Money you receive by mail is not income, it is mail! If you didn't open the mail you would never find checks that the IRS thinks is income.
2. Income you cannot remember must already have gone out; therefore it is not really income, it is outcome!
3. You should only pay income tax on the income that you still have left at the end of each year. Why should anyone pay income tax on money they no longer have, can't remember where it went, and definitely won't ever see again?
PART II: DEDUCTIONS
1. If you work in your home and have a home office you should declare all spaces that you have brainstormed in.
2. Do not forget to declare all mileage walked to get from any room in your home to your home office. Use the tax mileage table for cars, then multiply by 10 because you are on foot .(Multiply by 12 if you wear Nikes)
3. Be sure to declare your driveway. If you didn't have one you wouldn't have a place for clients to park and you would be out of business.
4. If you watch the news you can deduct your satellite dish, big screen TV, and home theater as educational materials.
5. All rented or purchased videos can be deducted as a private medical expense, as these are needed to help you relax (see Relaxation Therapy, sec 8403a,part iiv, subsection 301-x, Internal IRS Memo). Any mini-series can be declared a seminar if it was shown on a PBS station.
6. All restaurant meals eaten to avoid work are business meals and can be deducted.
7. All clothing that you have worn to work is deductible since going to work nude is against the law. All evening gowns, tuxedos, jewelry and furs are deductible if purchased with a plan to wear at a business party or formal event, plus all mileage to and from the stores from which you made your clothing purchases is considered business mileage and is deductible.
8. Pest control is deductible since the government can not expect you to do business in a bug infested environment.
9. All vacations are 100% deductible if you take a business or trade publication with you or if you watch the evening business news reports at least once each week on TV.
10. All of your children’s clothes are deductible since your children’s ability to create a good impression impacts on your business and career.
11. All plastic surgery, face lifts and fat farm expenses are 100% deductible since everyone knows that the better looking you are, the more money you are likely to make no matter what kind of skills you have.
12. Your phone bill is 100% deductible. Every time your phone rings, you expect (or hope) it is someone calling about making you money for your business, therefore just having a phone is a 100% business expense. Answering machines, on the other hand, fall into the medical equipment category. When you use an answering machine to screen calls it is considered a stress reduction strategy (see Relaxation Therapy, above).
13. Do you have pets? If your pets guard the house then deduct the cost of the most expensive security system on the market. Odds are your dogs, cats, iguanas, even hamsters do a better job than any security system. If your pets offer you love, joy and encouragement, deduct the amount you would have to pay for an escort service or therapy. When you go out to a restaurant and collect the leftovers in a doggy bag, you can declare the doggy bag bits as a full meal equal to the cost of your bill. Think of it as a dinner to go that includes home delivery. Give yourself a tip and declare that too. Many people think of their pets as partners. Set a room aside for your dog (or cat), call him a business partner, the room an office and- bingo! - you just increased your home business deduction by 100% , plus you can deduct his food, his magazine subscriptions, satellite dish, full-body massage, and health(vet)care. Why not? Your dog(cat) is now your partner.
14. Does your computer have a name? Does your computer have memory? Does your computer require endless attention and upkeep? Take the time needed to fill out the paperwork and get your computer a birth certificate, a social security number and a charge card. Now declare your computer as a dependent and if your computer defaults on the charge card, don't let it get another one.
15. Most of us on the Internet have very specific pages we go to for business. You may not have realized it but you can deduct Internet miles. How far is it to your nearest web site? At .31 cents/mile it can become a sizable deduction. If you start a chat room, and spend more than 8 hours a day there - Kristi R. take note! - it qualifies as a home office deduction. If your chat room holds 50 people, it must be at least 3000 square feet, so you figure it out!
16. Until you purchase clothing it is worthless to you and to the store. When you purchase a new suit it becomes valuable, which means clothing increases in value (IRS-speak: appreciates) when purchased. That also means that when you donate clothing to a thrift shop you should claim the full purchase price as the deduction. The thrift store should then sell your used clothes for an above original purchase price, since this clothing has acquired real value, unlike the unsold clothing still on the store rack.
If, despite all the excellent advice given above, you still feel you just can't face another 1040, you may want to consider the new EZ-EZ-EZ form 111 just issued this year by the IRS. It consists of only 3 lines:
A. How much did you make last year? ___________
B. How much do you have left?_______________
C. Send B.