|On Federal Income Taxes - Weeks 4 - 5
||[Oct. 20th, 2013|02:23 pm]
I'm sure I learned many more interesting things than are described below, but lately it's felt more like juggling an ever-increasing amount of balls than actually internalizing exciting new facts.
Depreciation rules in particular are out of control. Of course you could say that about US income tax law overall.
Basically it seems like you should make a big chart at the beginning (when you first acquire the item or switch it to business use) showing all the amounts ever, then look at it again every year to get the figure for that year's taxes.
I can't imagine Robin's grandfather dealing with all the depreciation rules. As a man who built three subdivisions and sold hundreds of houses, he had a lot of stuff that required depreciation, not to mention all the other business expenses he had to record.
I've had self-employment but I've never claimed expenses. [Everything I used was used mostly for personal use or provided to me for free (borrowing a transcription machine when I was transcribing social work interviews).]
The depreciation chapter made me wonder why I got into this class again. (Right, a chance at a practically guaranteed job for super cheap. Except for all the hours that are getting used up.)
The instructor said we don't have to actually know much about depreciation for this class or for the first year on the job, so that's something I guess.
There's yet another tax aid for having children and that's a credit for day care costs if the parent(s) are working or job hunting. You cannot take this credit if it's to allow one spouse to slip out for an affair--it has to be paid work. (And even then, you might not want the other spouse to know, and both are supposed to sign the return and know what they're signing.)
There's also a credit to help with adoption fees.
I knew you could get tax breaks for going to college now that it's too late for me. There are actually three ways, though each year you can pick only one of them for each student--no double-/triple-dipping. One of them might even be applicable to me if I decided to take college Spanish. You don't have to be in a degree program for the Lifetime Learning Credit, but it might be the case that your goal for the class is to either get a degree or to acquire or improve job skills. Spanish is a job skill. And if I like doing taxes, it would be handy for that job. Even if I don't like doing taxes, it would be handy for tutoring. Does it count as a "job" if it's volunteer? Or do they not even care? Instructor says they don't care--plus they can't even tell what you're taking, let alone whether it's counting toward a degree, let alone for a job.
[Things like this tax prep class are not deductible for any reason--it's not from a school that qualifies for federal financial aid, and it's to to increase skills for a current job (but to qualify you for a new job).]
In addition, you can get a break on the interest you're paying toward student loan interest later.
2013-10-20 08:01 pm (UTC)
My tax pro says pretty much anyone can take the lifetime learning credit. I got to take it for my photography classes. -Texpenguin