Thursday, December 21, 2006

DOG HOUSE TAX DEDUCTIONS



MAXIMIZING DEDUCTION FOR TAX ON DOG HOUSE
Mr. Brown Dog
: Do I have enough to itemize my deductions this year?
Taxxcpa: What did you spend for taxes, interest and contributions?
Mr. Brown Dog: I paid $ 7500 in Real Estate tax on my Dog House.
Taxxcpa: That’s a lot of tax for a dog house
Mr. Brown Dog. Yes, but I live in Highland Park and real estate is high there.
Taxxcpa: Do you have any other deductions?
Mr. Brown Dog. My mortgage is paid, so I don’t have any interest expense.
Taxxcpa: How about contributions?
Mr. Brown Dog. Bow Wow! I donated $ 3,000 to the SPCA of Dallas. Can I deduct that?
Taxxcpa: Let me check Publication 78 to make sure. Here is the link:
http://apps.irs.gov/portal/site/pub78/template.MAXIMIZE/menuitem.72f1796ad102792acd9e6be24937a759/?javax.portlet.tpst=289c57ca6035546c47564fe84937a759_ws_MX&javax.portlet.begCacheTok=token&javax.portlet.endCacheTok=token
Mr. Brown Dog: That’s a pretty long link, what did you find?
Taxxcpa: You’re in luck, the SPCA is a qualified organization, so it IS deductible. That makes a total of $ 10,500. That is $ 200 more than the $ 10,300 standard deduction.
Mr. Brown Dog: Then I guess I should itemize my deductions.
Taxxcpa: No. Here’s a better idea. Don’t pay your 2006 tax until Jan 2007, then pay your 2007 tax before Dec 31, 2007 and you can take two years tax in one year and instead of only having $200 more than the standard deduction it would be about $7500 more or less depending on what they allow as a standard deduction for 2007.
Mr. Brown Dog. Bow Wow!
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