[net.taxes] more deduction than income?

ddc@pyuxbb.UUCP (DD Choo) (01/31/84)

Can you deduct more than what you earn?
As a specific example, if someone earns $1000
and puts the entire money in an IRA account, 
can he/she still deduct some more (say $300)
for the depreciation of an item that was needed 
for doing business?
My guess is that you can, since I hear that a
business loss is compesated in part by a tax break.
I will appreciate any comments.

spear@ihuxm.UUCP (Steven Spearman) (02/01/84)

Note that the following is just my recollection.

For charitable deductions, there is a ceiling of
(usually) 50% of your adjusted income.  Any excess
over this amount can be carried over up to 5 years
generally.

For other deductions, I am not aware of a ceiling.
But if your deductions gets your income below
a few thousand you won't normally have any taxes to
pay anyway.  Going into the hole doesn't do anything
for you I don't think.

keesan@bbncca.ARPA (Morris Keesan) (02/02/84)

----------------------------
    Note that regardless of what percentages of income are LEGAL for certain
deductions (e.g. the alleged 50% for charitable contributions), there are
other percentages which, if exceeded, make your return much more likely to
be audited.  The exact numbers are information that is zealously and jealously
guarded by the IRS.
-- 
					Morris M. Keesan
					{decvax,linus,wjh12}!bbncca!keesan
					keesan @ BBN-UNIX.ARPA