If something is 100% tax deductable, does that mean that its essentially free or does it mean the price of the item gets deducted from your taxable income? I think its the latter but I want to be sure.
The latter. You still have to pay for it; you just don’t pay any income tax on the amount of money you paid for it.
Are there actual items - not charitable donations - that are 100% tax-deductible? I’ve got to find me some of those!
They’re usually things like calendars, notebooks, newsletters, subscriptions or other miscellaneous items that are somehow related to the non-profit organization in question. For instance, the Sierra Club calendar I bought is 100% tax deductible (it’s technically a donation to the Sierra Club Foundation).
After I thought for a second, I had to give myself a “duh” - there are lots and lots of things that are 100% tax-deductible (usually a person is only able to take advantage of this if he itemizes). E.g., work uniforms paid for by the employee. Loads of other stuff too.
Well I was just reading an article that says if you use a computer exclusively for your home business, you can deduct the full cost up to $24,000 as long as the amount doesn’t exceed your business income. That was going to be one hell of a computer I was going to get. 
Indeed, under certain circumstances, the cost can exceed your Gross Income from that Scd C.
BUT- would a tax deduction do you any good? I know a lot of people who don’t itemize, thus their “100% tax deuctable” items won’t help. In the case of a Sch C item, you don’t have to itemize, but you do have to have some reasonable amount of Taxable Income, or else it doesn’t help (at all or as much).
What they mean by “100% Tax deductable” is that when you BUY things- even from a Non-Profit- you are assumed to get FMV for the amount you pay- thus, since the amount of deduction is “Cost<FMV>= Deduction”, you have 0 deduction. Girl Scout Cookies are like that. Those yummy little boxes of diet death are worth about what you pay for them- thus no tax deduction.
But calendars & such like are often given away free- and thus generally the IRS figures there is no FMV, thus the entire cost is deductable.
In the case of the computer, what they were talking abot is a Sec 179 expense option. You opt to “expense” rather than “depreciate” that item. There are many many rules on this, and the IRS loves to audit this issue. Thus- it is often a bad idea. Personally, I’d just take a 3 years depreciation and not worry about the hassle. I’ll bet someone was trying to sell you that computer and using that as a selling point. If so- ask them- “Will you represent me at my Audit? Are you an Enrolled Preparer?” :rolleyes: 
The answer will not be “yes”. :dubious:
Do not buy stuff on the TAX advice of a salesman.
I’d be cautious about this, and check with my accountant first.
In work I’ve done as Treasurer for several non-profit organizations, we have always been required to inform customers that they cannot deduce the entire amount of the contribution – they must reduce it by the value of whatever tangible item/service they received. So if we have a dinner event at $150/plate, but the value of the dinner is figured as $20, per IRS regs, they can only count $130 as a deductible contribution.
Of course, on a calendar or similar low-price item, the difference is so small that the IRS is unlikely to ever come after that on an individuals tax return. But they might send the organization a nasty letter.
P.S. From www.sierraclub.org:
"Note: Contributions, gifts, and dues to the Sierra Club are not tax deductible. They support our effective, citizen-based advocacy and lobbying efforts. Your dues include $7.50 for your subscription to Sierra Magazine and $1 for your Chapter newsletter. "
Here is a link to the article. Its almost two years old so I don’t know if a write off like this would still be allowable.
Do you have a Self-Employed type business?
Sierra club does too much political lobbying, so most of it’s stuff is not tax deductable.
I started day trading full time a couple months ago.
Day trading is weird. It can be considered Capital gains & Investment income & expenses.
See a Tax Professional.
There has been a special deduction on SUVs in recent years. A company can deduct most to the cost of one in the first year (instead of spreading it over a number of years). This is one reason you see so many Hummers driving around.
Right now I can’t remember the details, but I once invested in something that the dividends could be subtracted from taxes, not just deducted off of income. On the scale I did it, it was just nice, but a much larger investment would have made it great.
That is true but in my experience most charitable organizations will send a letter telling how much of the contribution is deductible. If they don’t, you can call and ask them for one. Whatever they say is deductible is what you report as the contribution; it’s not like you, the contributor, have to figure it out. Small items like small books, calendars, inexpensive pens, etc., are often not found to any “value” that must be deducted, at least in my experience of processing about 200 contributions per year for my boss.
No- they won’t. Calendar, personalized mailing labels, pens & the like (under a certain value) are considered “promotional items” and have no FMV for the purpose of Charitable Contibutions. Missbunny is correct.
Day trading for your own account would probably be considered an investment activity, not a business, even if it is your sole source of income. You would report gains and losses instead of income and offset the costs of trading against those gains and losses as allowed by the IRS. There are different rules for long vs. short term capital gains and losses, and some net gains and losses are allowed only over a period of tax years, not as a lump sum. You really need a tax expert to advise you on these and other matters concerning investment income and stock transactions.
Deducting home office expenses, including a computer, is a wretched proposition. You will be audited and physically inspected and most likely denied the deduction. Computers are usually only allowed a partial deduction as any non-business related software or other evidence of non-business activity (i.e., internet history; kid’s homework, etc.) found on the computer reduces the allowable deduction. As for deducting a home office itself, something as silly as a child’s toy kicked under the desk is de facto evidence that the area is not used exclusively for business. Do your research on this matter and be sure you can meet the requirements before even attempting to claim such expenses.
This article says day traders can pull it off. If I tried (I’m not looking for a computer right now, just curious) do you think the IRS would really come to my house to see my work area? Any tips on how I can find a tax expert next year that knows how to deal with day traders?
Any chance I’d be able to do taxes by myself with software such a s TuboTax?
No, not as a “self employed Day trader”. It’s not quite as bad as Cillasi woudl have it, but you certainly need to consult a Tax Professional. Which- I am not, but my Bro is. He says to look in the Yellow Pages under “Tax” and find an “Enrolled Agent” (“Enrolled to practice” or “E.A.”) and they will give you a decent price and do a good job. Good luck!
Knowing the IRS, I find it hard to believe that they would allow you to claim that ‘this item has zero Fair Market Value’ while, at the same time, you are selling it at a specific price thru your website. (And it is a real selling price, not shipping & handling charges – those are separate.) Seems like having your cake and eating it too.
There are indeed promotional items given away to people. But these are given away, not sold. If it’s sold, by definition it has a market value.