As the end of the year comes around, its time to start thinking about another round of 1099s, W2s, deductions and audits. Now, I know most of you are probably having a tough time this year - even the rich feel the pinch when the government starts being people over the barrel. Lets face it: taxes support terrorism and its not patriotic to support terrorism anymore. So do the patriotic thing, and keep these handy tips in mind when you file your taxes:
Money you spend on lottery tickets and all forms of gambling (casinos, tables, tracks, bookmaking) is tax deductible and don't let anyone tell you differently. My fight with the IRS to write off nearly $50,000 worth of gambling losses (investments) against nearly six times that much in earnings (winnings) over the 1999, 2000, 2001, 2002 and 2003 tax years came to and end this year. They got all upset because I filed a Schedule C for my "Gaming Enterprise" (and I even used the proper NAICS code of 713290 on the return) and then proceeded to list all my deductions, including losses and expenses: mileage driving to casinos/tracks, hotels, airline tickets, meals, train tickets and such as business expense as well as income (winnings that they could find out about) and they didn't like that. They wanted me to to pay taxes on my full winnings despite the fact that there were substantial losses to deduct against the winnings in addition to expenses. They tried to disallow the expenses portion, saying that gambling is not a business. Bull fucking shit its not. A business is any series of actions undertaken with the intent of generating a profit. I sure as hell don't gamble to lose. Its a business. I won and they lost.
If you don't claim a deduction, there is a 100% chance you wont get it. For those of you who work from home, there are many tax deductions to be taken that you might easily overlook. Internet access, telephones, cell phone service and "break room supplies", to include Wiis and N64s, pinball machines and whatever to relive employee stress, and all A/V equipment, the stated purpose for which is to monitor news channels to ensure that the current political climate is capable of supporting your business's continued operations. Also deduct purchases of lawn and garden services or equiptment (have to keep the place presentable so clients will deal with you) dinners out (had to discuss a pressing business need... the kids went along because a baby sitter would have cost too much and would have been another deduction -- see, the IRS likes it when you think of them, here you are, innocent American, just trying to pay your fair share and not wanting to be wreckless), repaving/widing your driveway (have to have room for clients to park) and always make sure there is a business purpose for any home additions (more office space, meeting room, storage, etc) and deduct the fuck out of that.
If you don't get a 1099 and it is not traceable, don't claim it as income! If you are at the race track and you cash a winner that pays at less than 300:1 and/or is not over $600, you will be given cash and no 1099 is generated and no record of the win is kept other than AutoTote ticket which, unless you used a players card, is not traceable to a person. If at the casino on slots, tables, etc, its anything over $1,500 and you will get a 1099-G. Again, unless you use the card or have them write you a check, no record is kept and its not traceable. Even if you DO use your card or do have them write a check, as long as you do not complete a 1099-G or 1099-MISC, you can safely ignore that income on your tax return because no one is going to dig that deep unless you are making TONS of money under the radar like this. But a few thousand at each casino/track each year and no one is going to look.
If you need to set your conscience at ease, cheating the IRS on gambling taxes is absolutely the right thing to do, esp. when talking about horse tracks, because they tax the WPS (Win, Place, Show) and Exotics (Exacta, Perfecta, Trifecta, Superfecta, Pick 3, Pick 4, Pick 6, etc) pools right off the top, before you even get paid. Learn more about how Parimutuel Wagering works by reading
this. And on this topic, if you are playing the ponies seriously, you should know how the pools work anyway, and know when to bet Exotics and when to bet WPS for tax advantages.
Get a Taxpayer ID/FEIN and use it. For those of you who have programs like AdSense that allow you to easily update your TIN/SSN/EIN, make sure you take advantage of that. 1099s on independent contractor income don't get filed if you make more than $600 per tax year. Many companies consider the same payee with two seperate TINs to be two seperate people. Thus, if you make $500 per month from AdSense, you can switch your TIN in your account for one period to your personal SSN and then back to your EIN for the rest of the year, causing that month of income that you "filed" under your SSN not to get reported, thus tax free. This one tactic can allow you to hide a ton of money. Now the best part is, you can also switch it your wife's SSN and even use the kiddos for something useful. (When using kids for this, its only proper to set aside a percentage of the revenue for their college savings).
They catch all cheaters who fuck up on 1099s. The 1099 is designed to catch cheaters who under report. Make sure that what you are reporting ALWAYS totals more than your 1099s say you made or very bad things, like audits (which will catch all of the other shit you have pulled over) will happen to you. Always report more than what your informational returns (W2, 1099s, etc) say you made and you'll likely never be bothered by the IRS and get to keep alot more of your money. Just like J.G. Wentworth says in that TV ad, "Its YOUR money, use it when YOU need it!"
Use your overseas friends or post office boxes. Put down an international mailing address with a program and no tax ID, like you are an out of the country entity. Then, if the sponsor supports it, have them pay you by Western Union or MoneyGram. They can be claimed anywhere - including in the US. Cash is untraceable and if a 1099 dosen't get filed for this sponsor, you'll never have to worry about the IRS because they wont even know you run money through there. If the sponsor does not support this, have them write you a check and have it sent to a forwarding service that will send it to you here and then take it to a check cashing store. 5% is better than 33% and ACE will say thank you for your business, unlike the IRS. The third way to do this is have a friend overseas cash for you and then send you WU or MG. Be sure that your money gram transfers are smaller than $1100, otherwise ID is required and a different kind of report gets made and filed with the government by the service. Taking the time to set this up could save you thousands.
Always take cash payments when possible. Avoid credit, debit cards, ACH, wire and other traceable things when possible. If you are going to sell something, try selling it through Craigslist or your local newspaper and get cash for it.
Use WU, MG, eGold, etc and postal money orders. When money needs to be sent from Person A to Person B, use postal money orders wherever possible. You can cash them for free at the post office and that erases their connection to you for tax purposes. Sure, the IRS could go to every post office in the country and check to see what you have been up to, but what are the chances. If they go to fuck you, they are going to look at your bank account first. Anything you have linked to your bank account (PayPal, ePassporte, etc) is not safe because then they will learn of it when they crack open your acct for review. eGold is generally safe from IRS oversight for the most part. WU and MG are safe as long as you stay under $1,100 and avoid STRs (suspicious transaction reports).
PayPal, Amazon, 2Checkout, Major CC Processors, ePassporte and eBay are NOT tax shelters. When they come to fuck people, these will be the first to get the subpoenas. Anything you move through these should be considered discoverable, if you choose not to report it now, they may discover it later. If you get away with it for three years, you are home free as they can only go back three tax years to look for bad things you have done. BUT if they catch you cheating on your taxes within the 3 years, they can go back as far back as records exist and take your for the Royal IRS Assfuck Gangbang. So many government inspectors will be breaking it off in you daily, you should just kill yourself when you have been gotten.
(cont'd)