Yup, it’s that time of year again, when blood pressures rise, sleep is futile, and creative accounting is refined to an art form. Yup, it be the ides of income tax day.
Used to be I’d have read through the Form 1040 instructions and plotted my strategies before tax year’s end, but now that I’m retired and owing I don’t get serious ’til the last week or so. And yes, pick up and peruse 1040 and it’s instructions, never know when you’ll find a deduction or credit you never heard of. I generally speed read through the “additional taxes” and “additions to income” sections though…
So proceeding through good ol’ 1040, we first have to deal with the issue of marriage, and keep in mind here that even if your spouse has already fled the coup, complaining of the dozen or so “parts cars” in the yard, motorcycles in the living room, smelly metal things put in the oven, and your adaptation of the dishwasher as a “parts washer”… Until the divorce decree is decreed you still have the option of filing jointly or separately. Unless your spouse is of the same gender, in which case the feds still won’t honor your marriage even if you share an immaculate thousand plus square foot air conditioned garage with matching Snap On tool boxes and lifts.
Next up we’re asked for dependents; And are not our assemblages of motorcycles. classic cars and trucks, even tractors, very expensive dependents. But Noooo… And the IRS won’t even accept VIN numbers in place of Social Security numbers on the form. Worse yet, unlike the human dependents that become there own or somebody else’s expense (hopefully) at age 18, our wheeled mechanical dependents cost even more as they age… ‘Tain’t fair!
The next dozen odd lines regarding income are pretty self explanatory, we obviously don’t have enough, and don’t go looking too hard for any more to report! Now the fun part begins- Adjustments! Did you buy another couple thou in tools last year and once in awhile use one at work… Sorry, you’ll have to itemize that on Schedule A! However, if you managed to find a welding course or similar training in such “obsolete” and useful arts, you might be able to deduct that on line 34. And if you’ve got any money left, put it in an IRA… Unfortunately they’ll only let you “invest” it in boring stuff like stocks, bonds, CDs, etc.. Aah, if only we could invest our IRAs in old cars and motorcycles… Probably get a lot better rate of return too!
Time to flip the form over. Be careful with Line 39- Even though taxes are driving to drinkin’ worse than a hot rod Lincoln and you’re going blind from said drinkin’, you can’t actually claim blindness until you’ve gone blind. Read carefully all the other “credits”- for example, a moderate income retiree like me can put $2000 that I could have better spent on tools into an IRA and get a $200 tax credit to spend on less tools. I know, it don’t make sense, but do it. And no, I don’t make these crazy tax laws that give a retiree money for investing in a retirement savings account… And yes, ya gotta work all the angles- I have a UPS 401K even though I’ve never been a full time permanent member of the “brown army”.
On to “Other Taxes”, as if we need any more. Finally time to add it all up, you’re sitting down, I hope? Hopefully you’ll be getting a nice big check to “waste” on more toys and tools. If not, time to get really creative- Heck, the neighbors say your place looks like a pigsty and your garage a barn in bad repair… Maybe it’s time to retroactively become a “farmer” and deduct your old pickup, the garden tractor, and all that grass you tore up when you took that corner to fast?
Still can’t afford your taxes? Well, it’s time to plot long term strategy… Does the IRS really want a bunch of old clunkers and busted bikes with misplaced motors? Time to grunge up those old coveralls in anticipation of your eventual appearance in tax court!
(The disclaimer: This ain’t legal advice, even though you don’t have to be a lawyer to practice before the IRS. If you follow my advice and get invited to the local IRS office, I’ll come with… Not as a legal representative, but to laugh my ass off! And if all else fails, I hear that Federal Prison Industries will teach you to weld and you might even get to wrench on exciting government vehicles!)