Tax facts and deductions
By Paul Dion
Paul Dion, a certified public accountant, owns and operates his own full-service tax accounting firm in Millbury. Contact him at firstname.lastname@example.org.
- The growing tax code
In 2012, the Internal Revenue Code contained 9,000 pages. A pamphlet with the original 1913 income tax code required only 27.
- We’re here for you – maybe.
From 2004 to 2012, the number of calls the IRS received from taxpayers increased from 71 million to 108 million. However, the number of calls answered declined from 36 million to 31 million.
McDonald’s has received tax breaks to sell Chicken McNuggets overseas.
- Not for profit? Really?
Lady Gaga’s foundation, Born This Way, claims to connect youth with anti-bullying, mental health and other resources. But she reportedly paid millions of dollars to consultants in 2012. (She denied that claim.)
- A non-taxing job
Job search expenses are fully deductible beyond the first 2 percent of your AGI and as long as you itemized. The deduction is available whether you’re gainfully employed or not.
- Day-care deductions last beyond preschool
Most parents realize there’s a tax credit for day care when their children are young. But that same credit can be used for before- and after-school care, as well as day camps during school vacations.
- ‘Deadbeat friend’ deduction
Loaned money to a friend and were never paid back? You may qualify for a non-business bad debt tax deduction of up to $3,000 per year.
- Get paid for trips to the doctor
Medical miles (23.5 cents per mile) driven to and from appointments, plus travel (airline fares and hotel rooms) for out-of-town treatment can be deducted.
- Student loan interest
If a parent pays back their child’s student loans, the IRS treat that money as if the child paid. As long as the child is not claimed as a dependent, he or she can deduct up to $2,500 in student loan interest paid by the parent.
- State sales and income taxes
Thanks to last-minute legislation passed in December, taxpayers filing their 2014 returns can still deduct either state income tax paid or sales they tax paid, whichever is greater, if they itemize deductions.
Paul Dion CPA is the owner of Paul Dion, CPA (www.PaulDionCPA.com), based out of Millbury, MA. For a free copy of his book, “The Ten Most Expensive Tax Mistakes …that cost Real Estate Agents Thousands” contact Paul Dion CPA, via Info@PaulDionCPA.com or (508) 853-3292.