Ralph Havens | JK Harris & Company
If You Can’t Back It Up, Don't Write It Off
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Tracy StatonWondering which tax deductions inspire auditors to charge? Behold the top five, according to Ralph Havens, chief licensed taxpayer rep at JK Harris & Company. — T.S.
-Unreimbursed business expenses. Write off a third or more of your income? Expect a letter from the IRS.
-Charitable giving. Moses asked for 10 percent of income. Give more, and the IRS will want proof. Ditto if you’ve suddenly opened your pockets after years of Scrooginess.
-Home office. You’re entitled to deduct mortgage interest, property tax, computer equipment, and more — if your employer requires you to work at home. Flextime? No such luck.
-Alimony. If the spouse who pays claims it, the spouse who receives had better declare it. And child support isn’t alimony — or a legal deduction.
-Stock sales. Report the gross amount. The IRS will let you take a loss if you paid more. It just wants the dollar amount of the sale to match your broker’s 1099.
-KEY POINT: Don’t be afraid to take these deductions if you have documentation. “Some people won’t take the home-office deduction even if they’re entitled,” Havens says. “That’s crazy. Just be prepared to prove it.”
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