Thursday, April 14, 2005

Interest-ing Tax Relief and Doggie Deductibles

Weekend Assignment #55: The IRS, in its infinite wisdom, is allowing you to deduct one thing from your taxes that you haven't been able to deduct before -- anything you'd like. What do you deduct and why? Yes, anything. And your reason for deducting it doesn't even have to be good -- this isn't an audit, you know. I'm just curious as to what you'd pick.

Extra Credit: Do you wait until the last minute to do your taxes? Or did you have them done ages ago?

Once again this week, I'm making two passes at this assignment.  The first one isn't really new, but a revival of an old deduction.

I should get a deduction just for sorting this stuff!1. Credit Card Interest
Once upon a time, taxpayers were allowed to deduct interest on credit cards.  I wasn't doing the taxes then--that task used to fall to John or (when John co-owned a business, and for a year or two thereafter) an accountant.  But I remember gathering all the January credit card statements for tax time.  At the bottom of each would be

The total interest you paid on this account in 1989 was $768.89.

or whatever.

The credit card interest deduction was taken away years ago.  Now John and I are many thousands of dollars in debt, half of it to credit cards, and that deduction would help a lot.  This isn't a humorous answer, I know, but I feel pretty strongly about it.  It would help to offset the situation caused by banks offering too much easy credit, jacking up interest rates to people who can't afford it, and then lobbying Congress, successfully, to make it extremely difficult for people who are drowning in debt from credit cards or medical expenses to get out from under through bankruptcy.

Okay, you want something more amusing?  Then how about this?

2.  Dogs should be deductible.

Dogs perform a societal benefit.  They deter burglars, lower blood pressure, provide companionship, assist the disabled, guard the family, amuse visitors, help police, and give me something to blog about.  In recognition of this, the following expenses relating to the acquisition and care of dogs should be deductible:

  • deductible?Dog adoption fees or breeder fees (no deduction to buy from a puppy mill)
  • Dog licenses
  • Dog food and treats, possibly limited to a reasonable total to discourage doggie obesity
  • Dog household expense (food and water dishes, dog bed or blanket, dog house, doggy door)
  • Dog apparel and grooming (leashes, collars, a jacket if legitimately needed for that breed in that climate, brushes, combs, toothbrushes)
  • Veterinary and boarding fees
  • Spaying and neutering costs
  • Dog training
  • Dog funeral expenses (cremation or burial)

I think Tuffy is well worth that!  For 2004, I'd just have the vet, food and license to report.  In other years, at the beginning or end of a dog's life with us, these plus the other items would add up to a sizable deduction.

Yes, you can deduct your cat expenses, too, under my plan.  However, you can't deduct your pythons or tarantulas, because they don't pass the societal benefit test.

Extra Credit:  I just finished the taxes before writing this entry.  I might have finished last night, had I not been missing the 1098 from the mortgage lender.  I've had at least three paper-sorting sessions recently, each several hours long.  I've thrown away a ton of stuff, but I didn't find everything I needed.

And I just realized that I forgot to correct downward the stipend amount St. Michael's gave me last year as church webmaster. Oh, well, too late now.  I already e-filed.

While I'm on the subject:

the post-filing mess remains to be cleaned up.Last year was the first time I EVER did my taxes.  That may sound crazy, given that I just took a degree in accounting, and have been in the labor pool nearly every year since 1974.  But when I was in high school, my mom paid me not to file, on the grounds that it wasn't required for the pittance I made, and I'd have to do it soon enough.  In college, I made something like $12 a month reading to a blind graduate student.  Again, not enough to bother with. 

After that I was married, and John did the work.  When he owned a business with W, it got to be too complicated, and the job went to a CPA.  I don't know whether it was W's bookkeeping or an error by the CPA's assistant, but one year we had to pay thousands of dollars in income taxes.  That year, John had made some money, but not enough to justify that big a tax bill.  A decade or so later, I still don't know exactly what happened, or how, or who was to blame for it.  I'd never done the taxes, I didn't see the figures, and at the time I'd never taken a bookkeeping course, let alone accounting courses in income tax.  But this was the event that started the ball rolling on the serious debt we're in now. 

Last year at this time, I'd been blogging less than a month, and I think I had two readers.  John insisted that as an accounting student, I should be the one to do the taxes, and I agreed.  I had not yet taken the one little tax course in the UoP accounting curriculum, but there was no business to account for, no estate of my mom's to be settled.  So I bought TurboTax.  A fellow student helped me get started, and I finished on my own.  It was remarkably easy.  I was so enthusiatic that I wrote a blog entry called Hooray for Taxes!, about how easy it had been, and how worthwhile and necessary it was to support the government financially, despite some of the less-than-wonderful stuff it does.

The next day, I decided that it was kind of an insane, naive, nerdy, toadying thing to write, and might get me audited.  So I deleted it.

This year, TurboTax had us sitting at $1304 federal tax due until I figured out, on the third try, how to get my lifelong learning credit into the program. Somehow either the program had skipped that part or I'd missed it.  Fixing this took us into refund territory, but only on the Federal.  We owe the state, as usual only more so.

John was nervous about my taking so long, and wondered whether I was messing it up.  He wasn't the only one.  I thought briefly that I'd missed a major deduction, and would need to file an amended return.

No, it wasn't so easy this time around. 

Karen

14 comments:

ondinemonet said...

Karen :)

I used to do the taxes, then have Alan check them over because I somehow missed the math gene. LOL. Anyway he has done them the last few years officially, but he still has me keep it all together in the computer and on file. We haven't ried Trubo Tax, but I think we may consider it next year. As for the pets...yep...it's about time we are allowed to take a deduction for them, especially we responisble pet owners who help control the pet population. Excellent entry!

Always, Carly :)

gabreaelinfo said...

Nice dog.
Gabreael
http://journals.aol.com/gabreaelinfo/GabreaelsBodyMindSpiritJournal/



ryanagi said...

My dad had me do my own taxes right from the time I got my first job. He thought it was one of those important life lessons. Of course, I just filed the 1040 EZ form. Not a really stretch of my intelligence. LOL

courlog said...

Wouldn't the credit card interest help us all?  Oh boy, one can wish, right?

pixiedustnme said...

I've often considered switching to be an accounting major - I do like numbers and doing my taxes doesn't frustrate me...... too much!  lol   http://journals.aol.com/pixiedustnme/Inmyopinion/entries/906

jabarett said...

Add cats to your list! They also work with the blood pressure and companionship angles. And yeesh, I just spent $182 at the vet getting both kitties their annual injections and treating a nasty case of contact dermatitis on one cat. Dang, I think I spelled that wrong, but it's Friday, I've finished most of my work, and my brain is trying hard to shut down. It can't as I still have to pay my quarterly taxes (ouch) and get my MIL's taxes signed and to the Post Awful. She doesn't have to pay anything, but it still has to be done. And I have to do laundry. The cats shed big time at the vet office, not to mention that it's laundry day anyway.

And yeah, I love TurboTax.

I'm doing the rest of my work in front of the Telly. <i>Peter's Friends</a> is on Showtime this afternoon. I just need a Fry and Laurie fix, and I'm not sure that I've properly set the PVR with the worst user interface EVAH to record this movie. Excuses, excuses.

deabvt said...

How about a $$ write-off for each hour devoted to your Journal?
V

cneinhorn said...

I like V's write off suggestion!  And I agree, dogs should be duducted.  vet bills, food etc...too bad credit card interest isn't anymore, what will they take away next? mortgage interest?

bubliebabie69 said...

I was wondering if i could find a sight that would let me read the book "And Both Were Young". I've read it before, but i have seemed to misplaced my copy and i need to know the names of Flip's three roommates and other things that happened in the book in order to report acurattely about the book, but i've only until Monday, so can you help me?
~ maraina~

mavarin said...

Note to ~ maraina~ (I don't have a valid email address for you)

All I can suggests is either a library or a bookstore (it's in paperback) for the book itself, or looking at the Amazon.com listing for it.

Honestly, it's also been years since I last read this one, and I tend to confuse parts of it with the Small Rain.  Flip and Katherine had kind of similar experiences--both were socially awkward, artistic, and stuck in a European boarding school.  For And Both Were Young, I mostly remember Paul and the skiing stuff.

Good luck!

Karen
email: mavarin @ aol.com

sakishler said...

Thank you for including cats. Honestly, I always feel strange not listing Meelo as a dependent.

onemoretina said...

  I sure agree with the credit card deduction.  Used to be nice, didn't it ?  Tina

inksmiths2 said...

we have 12 dogs ,we could use the tax deduction for our pets, they are like kids without the arguments and back talk. pets are great.

juniebugisjane said...

What exactly does toadying mean? I thought your article was creative and kept my attention, so I'm not being facetious. It sounds like a word that would be fun to use, but I don't want to sound niave, nerdy or any of those other things by misusing a cool, new word.

My son is trying to come up with an illustration for his school literary magazine. The magazine's name is The Muse. That's what caught my eye and why I read your article. We didn't know what "muse" meant, but now we do and since you like the word too, I wonder what you think a creative illustration for the cover would be.

Thanks....Jane