dgl@houxd.UUCP (D.LEEPER) (11/12/83)
Enough is enough. Income tax is here to stay. Discussions of whether it is legal are interesting but futile -- anyone who doesn't pay taxes based on the arguments showing up in this newsgroup risks prosecution for tax evasion. On the other hand, tax *avoidance* is perfectly legal. As 1984 draws nigh, I hope this net will shift to discussions of perfectly legal tax deductions, deferrals, and shelters -- especially those that could apply to all us working stiffs. For instance, if you frequently drive your personal car to off-premises locations for meetings, or if you are driving to a temporary work location, you can save a tidy sum by deducting your "costs." These costs include gas, oil, repairs, license and registrations fees, car washes, auto club memeberships, and, most importantly, depreciation. Adding up these costs and deducting them as instructed in a good tax guide (like Lasser's "Your Income Tax"), may take a couple of hours work with a calculator and a pencil, but it's time well-spent, especially if you have a new car. Are there other frequently overlooked deductions we can share?
rlp@cbscd5.UUCP (R L Platt) (11/14/83)
OK, here are a few things you can do NOW to lower your taxes.
[1] Try to defer income (salary, consulting fees, etc.) till
next year when the (U.S) tax rates will be lower.
[2] Try to incur deductible expenses NOW. This includes
things like:
[a] Interest charges (prepay some of next years
loan payments)
[b] Professional organizations, journals - Pay
your ACM/IEEE dues this year, get your N
year subscription to a computing or financial
journal.
[c] Buy a computer - try to convince the auditor
that you DON'T use it to play Zork!
[d] Sell those Coleco shares you bought at 67, or
the Fortune Systems you bought at 22. If you
held it less than a year you can take a short
term capital loss.
[e] Give money to your favorite charity or favorite
political candidate (check limits for political
contributions).
[3] Consider an IRA - you can deduct the cost of the IRA (up to $2000)
from your gross income. In MOST states you can even deduct it from
your state taxes. The interest on the IRA is tax-deferred. You have
till April 15th (perhaps even August 15th) to pick up an IRA for
deductions on 1983 taxes.
R. L. Platt
cbscd5!rlp
P.S. I WON'T be there if you get audited!thomas@utah-gr.UUCP (Spencer W. Thomas) (11/14/83)
Note: the Congress recently changed the time constant for long term vs short term capital gains/losses to 6 months. Not sure when this goes into effect. This can have a negative effect if you're trying to offset income, since you'd like to show them as short term losses (on the other hand, you want to show gains as long term). =Spencer
tjt@kobold.UUCP (T.J.Teixeira) (11/15/83)
cbscd5!rlp suggests:
[2] Try to incur deductible expenses NOW. This includes
things like:
[a] Interest charges (prepay some of next years
loan payments)
If I prepay next years loan payments (car, house, whatever) it counts
as *principal*, not *interest*. I believe that the interest must
always be a percentage of the unpaid balance on the loan.
What about late payment penalties? Are these deductible if they are
any different from the interest on the interest? Maybe the way to get
extra deductions from interest charges is to pay everything as *late*
as possible so as to get lots of interest charges :-) (I'd rather pay
the tax than the interest -- the tax is cheaper. Besides, if you want
to just throw money away, their are lots of charities more deserving
than the banks).
--
Tom Teixeira, Massachusetts Computer Corporation. Westford MA
...!{harpo,decvax,ucbcad,tektronix}!masscomp!tjt (617) 692-6200lmg@houxb.UUCP (L.M.Geary) (11/15/83)
# Congress did NOT pass a bill to reduce the capital gains holding period to 6 months. One of the Senate committees (Finance?) passed it, but it has yet to go to the full Senate or House. The bill also has a provision which reduces the amount of capital loss which can be deducted from current income from $3000 to $1000, which means HIGHER taxes for those of us who didn't do so well in the market. Larry Geary AT&T Information Systems Holmdel, NJ ...houxb!lmg