<html xmlns:v="urn:schemas-microsoft-com:vml" xmlns:o="urn:schemas-microsoft-com:office:office" xmlns:w="urn:schemas-microsoft-com:office:word" xmlns:st1="urn:schemas-microsoft-com:office:smarttags" xmlns="http://www.w3.org/TR/REC-html40"> <head> <META HTTP-EQUIV="Content-Type" CONTENT="text/html; charset=us-ascii"> <meta name=Generator content="Microsoft Word 11 (filtered medium)"> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="PostalCode"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="State"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="City"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="place"/> <o:SmartTagType namespaceuri="urn:schemas-microsoft-com:office:smarttags" name="PersonName"/>  <style>  </style> </head> <body lang=EN-US link=blue vlink=blue> <div class=Section1> >>Example: you buy a tool for $1,000.00.  It's a business expense, yes, but it just cost you $1,000.00.  The tax on $1,000 might be around $150.00 (just a guess).  Had you not bought the tool, you would still have in your pocket the $850.00.  ($1000.00 - $150.00 = >>$850.00).  In effect, yes, you got the tool for $850.00, but you no longer have the money that was used to purchase it. :-) <o:p></o:p> <o:p> </o:p> But you do have the equity of the tool. This may prove to be more valuable than the cash if the devaluation of the dollar continues to escalate. Investing in tools is an investment, not an expense. It is an investment that will not only be a tax write off, but hopefully (if done wisely) will actually contribute to the bottom line and give you more free time. And good quality tools will have resale value when you retire. <o:p></o:p> <o:p> </o:p> <div> Dean<o:p></o:p> <u1:PERSONNAME u2:st="on">Dean May</u1:PERSONNAME>             cell 812.239.3359 <o:p></o:p> PianoRebuilders.com   812.235.5272 <o:p></o:p> <u1:PLACE u2:st="on"><u1:CITY u2:st="on"><st1:place w:st="on"><st1:City w:st="on"><u3:place u4:st="on"><u3:City u4:st="on">Terre Haute</st1:City></u3:place></u1:CITY></u3:City> <u1:STATE u2:st="on"><st1:State u5:st="on"><st1:State w:st="on">IN</st1:State></u1:STATE></st1:State>  <u1:POSTALCODE u2:st="on"><st1:PostalCode u6:st="on"><st1:PostalCode w:st="on">47802</st1:PostalCode></u1:POSTALCODE></st1:PostalCode></st1:place></u1:PLACE><o:p></o:p> </div> <o:p> </o:p> <div> <div class=MsoNormal align=center style='text-align:center'> <hr size=2 width="100%" align=center tabindex=-1> </div> From: pianotech-bounces@ptg.org [mailto:pianotech-bounces@ptg.org] On Behalf Of John Formsma Sent: Monday, April 21, 2008 9:47 AM To: l-bartlett@sbcglobal.net; <st1:PersonName w:st="on">Pianotech List</st1:PersonName> Subject: Re: Desperate Deductions<o:p></o:p> </div> <o:p> </o:p> <div> On Mon, Apr 21, 2008 at 7:48 AM, Leslie Bartlett <<a href="mailto:l-bartlett@sbcglobal.net">l-bartlett@sbcglobal.net</a>> wrote:<o:p></o:p> </div> <div> <blockquote style='border:none;border-left:solid #CCCCCC 1.0pt;padding:0in 0in 0in 6.0pt; margin-left:4.8pt;margin-right:0in'> <o:p> </o:p> Audits aren't fun~!  However the guy who does my taxes says the Feds are way short on manpower, so reasonable returns have a fairly good chance of not getting audited.  But when they do...........  I surely didn't have fun!<o:p></o:p> </blockquote> <div> <o:p> </o:p> </div> <div> Last week, a tax expert on a national radio show said that this year the IRS will be doing random audits.  This means that even if one has a reasonable return, he might be subject to an audit.<o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> The original question was about extra expenses in an attempt to reduce tax liability.  Generally speaking, unless you were going to spend the money anyway, it would be better just to pay the taxes.  Otherwise, you're just spending money.<o:p></o:p> </div> </div> <blockquote style='margin-left:30.0pt;margin-right:0in'> <o:p> </o:p> </blockquote> <blockquote style='margin-left:30.0pt;margin-right:0in'> Example: you buy a tool for $1,000.00.  It's a business expense, yes, but it just cost you $1,000.00.  The tax on $1,000 might be around $150.00 (just a guess).  Had you not bought the tool, you would still have in your pocket the $850.00.  ($1000.00 - $150.00 = $850.00).  In effect, yes, you got the tool for $850.00, but you no longer have the money that was used to purchase it. :-) <o:p></o:p> </blockquote> <blockquote style='margin-left:30.0pt;margin-right:0in'> <o:p> </o:p> </blockquote> <blockquote style='margin-left:30.0pt;margin-right:0in'> The same principle applies to deducting things like interest on a mortgage.  Yes, you can deduct that.  But you're better off not  having a mortgage, and just paying the taxes you owe.  To put it another way, if you had the cash, you wouldn't go out and get a $100K mortgage just so you could claim the deduction.<o:p></o:p> </blockquote> <div> <div> <o:p> </o:p> </div> <div> One relatively simple thing you can do is to increase your deductible miles.  Trips to the bank, or to buy supplies are deductible.  Anything business related.  Vacation type trips are not deductible if you tune a piano on the way, however.  I think you have to spend at least half of the time of a trip for it to be a legitimate business trip.  So my trip to my in-laws in <st1:State w:st="on"><st1:place w:st="on">Nebraska</st1:place></st1:State> where I'll tune their piano is not a business trip if I just tune their piano.  If I spent half my time there doing piano work, it would be, however.<o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> Since I live in a rural area, I make the most of my miles.  My grocery store is 35 miles away.  I usually shop after working there, but if I have to make a special trip for something, I'll also stop by Fastenal or Lowe's to buy something business related.  Instant mileage deduction ... as long as it's a legitimate business expense.  Keep meticulous records.<o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> Other things you could do is set up a home office.  I have mine in the house, and deduct a portion of my utilities for the home office.  It's better to have a separate room or office building (something small and unattached to the house, or a room clearly separated from the rest of the house).<o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> Do you deduct your cell phone expenses?  Get a cell phone dedicated to the promotion of your business, list it on your biz cards, and you can deduct that.  Have a web site?  Deduct it.  Need a new computer or printer?  Buy it for your business, and deduct it.  Just be sure to use it mostly for business.  It's a legitimate expense.<o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> You might find some good help at this site: <a href="http://www.taxhelponline.com/">http://www.taxhelponline.com/</a><o:p></o:p> </div> <div> <o:p> </o:p> </div> <div> <o:p> </o:p> </div> </div> -- JF <o:p></o:p> </div> </body> </html>