It’s that time of year again.  Tax season!  (I’m not sure why I find it so exciting, but it evidently has something to do with being the sort of person that would rather sit writing for a personal finance blog rather than watching TV, playing video games, or participating in underground Lucha Libre matches.)  It seems like a good time to touch on the things that are a little different for our little community.  If you’ve been following carefully you probably don’t just plug your W-2 into Turbo-Block and forget about it.


TurboBlock
Does Contract Work Need To Be Reported to the IRS?

Sometimes this can be a little difficult.  If you do contract work for a big organization they’ll generally send you a 1099 if you make over $600.  If you make a really small amount of money say less than $100, some folks tell you not to worry about it.  Those are terrible people.  You owe the IRS that money.  Some laws I don’t take seriously, I jaywalk from time to time.  Some laws many people don’t take seriously, I don’t think I know anyone that had their first drink after 21. Don’t screw around with the IRS.  I always pay every penny I owe on my taxes.  When I order something on amazon I mail State of Colorado a check for 2.9% of the sale value.

Make Use Of The Saver’s Tax Credit

This is the dumbest tax credit I’m aware of.  I mean you get a discount on your taxes if you’re rich enough to not be living paycheck to paycheck.  Basically, it seems to be a bonus you get for using other tax shelters really well.   I couldn’t be happier to take advantage of it. By my math you can use it to pay $0 in federal tax even if you already make $44,750 as an individual.  It is completely and utterly ridiculous, you can basically double that figure if you’re married and filing jointly.  Sure, you need to throw most everything into 401k’s, IRA’s and HSA’s, but it’s not like maxing those is a terrible idea on its own.  See our article here.

Most Investment Expenses Can Be Deducted

One bit that new amateur investors often miss is that all investment expenses can be deducted against investment profits.  Let me repeat that, all investment expenses can be deducted against investment profits.  Your brokerage will handle the easy part.  Your cost basis is an expense, your brokerage fee’s are an expense.  Any decent brokerage will calculate these costs and report the difference (hopefully profit) to you.  You need to add in any other costs you might have had.  For example, a subscription to the Wall Street Journal, any investment books that you purchased, if you subscribe to an investment newsletter.  All of these are deductions.

Can You Deduct Travel To An Annual Meeting of Stock You Own?

The only major expense associated with investing that you can’t deduct is cost of travelling to an annual meeting of a stock you own.  This is unfortunate, but ultimately sensible on the part of the IRS.  There are enough companies in the United States that it was pretty easy to simply find a place to go, find a company with an annual meeting close enough, and deduct your plane flight.  Everything else related is fair game.  Depreciation on your laptop can even be deducted as a 2% item if you use it for investment purposes.  If you’re looking at any non-standard or large deductions in this area it’s a really good idea to ask a tax professional.  I’m a scientist.  That isn’t a defense when you get audited.