April 5, 2016
5 Surprising Taxes & Deductions You Had No Idea Existed!
Taxes & Deductions You Had No Idea Existed
Filing your taxes can be a headache! Do you know everything you're being taxed on? Do you qualify for certain deductions that you aren't aware of? Does the Internal Revenue Service (IRS) know something you don't want them to know…? Luckily, this year you have three whole extra days to file your taxes if you haven't done so already! Tax Day usually falls on April 15, but this year Washington D.C. decided to move the holiday to the following Monday, April 18.
The IRS will tax anything and everything they can. The following is a list of five different surprising things the IRS can and does tax you on. Some of them seem so ridiculous! Additionally, it's possible that you're eligible for some of these wacky deductions we've listed below.
The following are all things the IRS taxes you on:
1) Social Security
Yes, even though you've worked your entire life to earn Social Security the IRS will still take their cut. If you earn more than $25,000 annually as a single taxpayer or $32,000 if you're filing jointly the IRS will take a piece of your Social Security.
2) Gambling Winnings
Whenever you win more than $600 at the casino or racetrack the venue reports these earnings to the IRS. If you continue to hit it big you will be sent a 1099 form. The gambling statute includes winnings from fantasy sports teams as well. So if your fantasy football team does well this season you'll owe the IRS a piece!
3) Found Property
Who wouldn't want to find buried treasure in their backyard? Well if you do the IRS will consider the treasure trove income. An anonymous couple in California discovered $10 million worth of gold coins in their backyard in 2013, when all was said and done they had to pay nearly 47% to the Federal Government and the State of California.
4) Olympic Winnings
Did you know that winning Olympic athletes don't just walk away from the games with a shiny metal? The U.S. Olympic Committee writes a check to all top three place winners, $25,000 for gold, $15,000 for silver and $10,000 for bronze. Which means that over the course of his career, Michael Phelps had to pay taxes on the $550,000 he earned from just his gold medals!
5) Prizes From Your Employer
We all want to do an excellent job in the workplace but if you do so well that your boss rewards you, that's additional taxable income in the eyes' of the IRS. For example, if you win a sales promotion and your employer rewards with a two-year lease on a car, you'll have to declare the value of the lease as income.
We hope this list didn't make you so angry that you want to throw 92,000 pounds of tea into Boston Harbor, because that's already been done.
To offset the sadness you feel from learning these shocking taxes we've also
a short list of unusual deductions that The Tax Court has allowed in the past!
We hope you can claim some of these expenses:
1) Pet Moving
If you're relocating for a new job, you probably know that these moving expenses can be deducted. But did you know you can also deduct the cost of moving your pet? Your cat, dog, bird, python or whatever it may be counts as personal property and is treated like any other item in your home!
2) Clarinet Lessons
In 1962 an orthodontist argued that playing the clarinet helps to correct a child's overbite. So if your child has an overbite and also wants to learn how to play an instrument, persuade them to choose the clarinet because you can write that off!
3) Swimming Pool
If you have a medical condition that would improve with a swimming regime your pool expenses could be a deductible medical expense. That's exactly what happened with a case of an arthritis patient who was prescribed to swim to treat his condition.
4) Getting in Shape
If your doctor tells you that your health or even your life is in jeopardy due to the fact that you're overweight, the method you choose to shed those extra pounds can be deducted! You can lower your cholesterol and deduct the expenses as long as your doctor signs off on it!
If you'd like to donate your time to a charity but need to pay a babysitter in order to comfortably leave the house these expenses can be deducted! In other words you can pay someone to watch your child while you work for no pay.
Happy Tax Day! We Hope Uncle Sam is on your side this year!