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Crazy Tax Deductions: 10 Claims That Didn't Quite Fly


Tax deduction traps By Peter Blank, Editor, The Kiplinger Tax Letter

Over the years, taxpayers have concocted a lot of zany arguments to justify tax deductions. We've come up with what we think are the 10 most creative ones that the tax courts decided didn't quite pass muster.

As secret agent Maxwell Smart would say, "Missed it by that much!"

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Cities with the Lowest Tax Rates

The total amount of tax you pay reaches far beyond what you owe the federal government. Depending on where you live, most likely you're required to pay additional taxes, including property and sales tax. The disparity between the amount of tax you pay in a low-tax city and that in a high-tax city can be dramatic. Living in any of these 10 cities could save you a bundle, although the exact amount may fluctuate based on your income and lifestyle choices.

Cities with the Highest Tax Rates

Much ado is made in the press about federal tax brackets, but cities can carry a tax bite of their own. Even if you live in a state that has no income tax, your city may levy a variety of taxes that could eat away the entire benefit of living in an income tax-free state, including property taxes, sales taxes and auto taxes. Consider all the costs before you move to one of these cities, and understand that rates may change based on your family's income level.

Great Ways to Get Charitable Tax Deductions

Generally, when you give money to a charity, you can use the amount of that donation as a deduction on your tax return. However, not all charities qualify as tax-deductible organizations. While there are many types of charities, they must all meet certain criteria to be classified by the IRS as tax-deductible organizations. There are legitimate tax-deductible organizations in many popular categories, such as those listed below.

A Freelancer's Guide to Taxes

Freelancing certainly has its benefits, but it can result in a few complications come tax time. The Internal Revenue Service considers freelancers to be self-employed, so if you earn income as a freelancer you must file your taxes as a business owner. While you can take additional deductions if you are self-employed, you'll also face additional taxes in the form of the self-employment tax. Here are things to consider as a freelancer when filing your taxes.

Tax Deductions for Voluntary Interest Payments on Student Loans

Most taxpayers who pay interest on student loans can take a tax deduction for the expense ? and you can do this regardless of whether you itemize tax deductions on your return. The rules for claiming the deduction are the same whether the interest payments were required or voluntary.

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Americans already waste $431 billion per year complying with our tax code, yet the IRS is clearly incapable of doing its part by providing basic services to those taxpayers – such as picking up the phone. What does the IRS demand as a solution to its failures? More of your money. That’s right – the IRS wants an increase to the $11.8 billion they have already been given.

We don’t need to reform the IRS; we need to eliminate it.

That is why I am championing H.R. 25, the FairTax, which would dismantle the IRS and replace our current tax code with a 23% consumption tax at the final point of purchase for new goods and services. Not only would the FairTax do away with the headache of income tax compliance, it would also replace all other federal taxes. Congress wouldn’t need to continue debating whether or not Americans should get another two-month “holiday” from the payroll tax – the FairTax would permanently eliminate it. We wouldn’t have to keep fighting over which industries should continue to be subsidized with federal dollars in this budget-slashing era; the FairTax would eliminate them all and level the playing field for everyone.

January 21 2012 at 8:29 AM Report abuse rate up rate down Reply

Now that's a man who loves his porn. I have spent money on it, but not that much. Movies, not ladies of the night.

January 19 2012 at 7:41 PM Report abuse +1 rate up rate down Reply

Well.......prostitutes are cheaper than wives, and complain less.

January 19 2012 at 5:17 PM Report abuse +2 rate up rate down Reply

Crap. So much for my "massage therapy" deductions.

January 19 2012 at 5:04 PM Report abuse rate up rate down Reply

thats correct, if if you want a job done right, either hire a professional or do it yourself.... :D

January 19 2012 at 5:01 PM Report abuse rate up rate down Reply

Prostitutes, good for America, IRS bad.

January 19 2012 at 4:53 PM Report abuse rate up rate down Reply


January 19 2012 at 4:45 PM Report abuse rate up rate down Reply

A prostitute.The best thing about them?You only have to pay them once not weekly.lol

January 19 2012 at 4:40 PM Report abuse rate up rate down Reply
Lightning F2A

Ahh prostitutes, the perfect woman - she always says yes and you get to see her leave when you're done.

January 19 2012 at 4:22 PM Report abuse +1 rate up rate down Reply
2 replies to Lightning F2A's comment

Your perfect woman is someone you have to pay to every time you have sex? I guess you can't get it any other way...lol.

January 19 2012 at 4:32 PM Report abuse -1 rate up rate down Reply
2 replies to vanessaem's comment

He just prefers to pay as you go instead of the lump sum method.

January 19 2012 at 4:38 PM Report abuse +1 rate up rate down

Every man pays, only b/c every woman expects to be paid.

January 19 2012 at 5:26 PM Report abuse -1 rate up rate down

Your getting some flak for your Comments..I thought it was really funny. Ya gotta be divorced, I am!! thats why we find it funny

January 19 2012 at 4:41 PM Report abuse rate up rate down Reply


January 19 2012 at 4:16 PM Report abuse rate up rate down Reply