Fashion, Charity And Death
Your Tax Questions Answered

YOUR FAQ:

Can I deduct volunteer time as a charitable expense?

No. Charitable contributions must be tangible and measurable — money, securities, art, real estate.  You can deduct mileage and unreimbursed expenses under some circumstances.  Read more here:

Okay, I build boats for a living and this guy named Gilligan jumped ship and stiffed me.  Can I deduct that, please?

You can’t write it off if you never wrote it in. So if you report “cash basis”, then you never paid taxes on it and thus cannot deduct the loss.  If you include your receivables (“accrual basis”), then you reported it as income when the sale was concluded and may deduct the loss.

I landed a new job in sales and upgraded my wardrobe. Pretty please?

Nope — the tax code can be magnanimous but these are purely personal expenses.  You also cannot deduct perfume, lipstick, lip balm, an electronic toothbrush or your coconut-lime shaving cream. (Okay, lipstick if it is part of a costume and you are an actress; lip balm if you work for Mary Kay and buy samples.)

My mom passed away and left me a small inheritance. I hear all kinds of stuff about “estate taxes”.

Finally, some good news! Mom’s estate may need to be pay taxes but the beneficiaries do not.  Now, the income on the investments she left for you is subject to tax and if you are a beneficiary of mom’s retirement plan you may be subject to taxes on some of that income when she passes.

I live alone and my nine cats are my life.  I feed them and they live in my shoe.  Why can’t I deduct them?

Prior to the 1980’s you may have been able to pull this off, albeit illegally.  Then they started asking for social security numbers and the number of dependents suddenly dropped by millions….

NOTE: Federal and state tax laws are subject to change. This article is presented exclusively for informational purposes and is not intended to substitute for obtaining tax or financial advice from a tax or other business professional.