Surprise, surprise, boys and girls, the tax man cometh–April 17 is the big deadline. You haven’t filed yet? You have a box of receipts calling your name? Fret not, for we Queerty staffers have a spy in the IRS to help you through your troubling times. He’s put together his list of Top Ten Tax Tips For Gay Guys, so you can file your return with peace of mind.
Can I deduct my boyfriend’s kids? How do I avoid an audit? Mr. Tax Man has some great ideas, and he’s probably the only IRS employee who is on our side. We promise, it’s the least boring list of instructions you’ll ever see with the word “taxes” on it.
I don’t say it out loud in a crowded room this time of year, but I’m a tax examiner for the IRS. First, let me say this about the world’s second oldest profession: we don’t dream up all these rules and loopholes. Your congressmen and senators write tax laws, we just collect them.
1) Try going to IRS.gov on the internet and doing your own taxes. Don’t laugh. I used to carry my receipts to my accountant in a shoe box before I started working for IRS. I was clueless.
Hit the “efile my taxes” link, pick any one of the programs shown (TurboTax is great), and it’s usually free if you made less than $40K for the year. And it’s completely idiot-proof; no legal mumbo-jumbo, no long instructions, they just take you step-by-step through basic questions of how much you spend, how much you earn, no biggie. Even with the most complicated tax return you’ll be done in an hour. There’s no harm in trying; give it a shot, and if you get cold feet half-way through, just click “delete.” But you’ll like it, I promise.
2) Damn “tax preparers”…what a crock of bullshit. They just read the same questions and type in your answers. Then they charge from $200-$400+ before throwing you out. They get paid “by the form,” so they’re always dreaming up more forms. No charge for putting in wrong social security numbers (sure to get a letter from us), or telling you its OK to claim the kid across the street as a deduction because you popped for a couple of Big Macs last year.
Unless they are accountants 365 days of the year, don’t let them touch your taxes. Just an opinion from the tax man.
3) If you do go to an preparer, and he starts telling you how much money he’s going to save you because he knows tricks, make for the exits. You’ll be hearing from us one day, and it starts with a letter you’ll need a team of lawyers to help you understand. There are no tricks with the IRS. Think you’ll have that preparer to run to when you get our letter telling you to start verifying all that bullshit you entered? His office is probably closed after filing offseason. You’re on your own to talk to me.
If the IRS notices a preparer has filed shifty returns for several people, we’ll go back and audit every tax return he/she prepared that year. If he was shiesty with one, he was probably shiesty with them all. And yes, we do these group audits all the time.
4) Rapid refunds from tax preparers….these are juice loans. As in, Tony Soprano loans. They pay you while they wait for your return to come in; but if we hold your refund because “something” isn’t right, you have to pay them loan shark rates. Be patient. Hold your water. Don’t do rapid refund.
5) Charitable donations can raise a red flag, since people abuse the charitable donations deduction all the time. For instance: if you have a car for ten years, and you donate it to a church, you don’t deduct what you paid for it. If you donated it to a church, it’s probably a piece of shit that’s worth nothing. So you can’t take any more than the Blue Book value of the car on the day you donated it. Or better yet, if you like that church so much, just give them your piece of shit car and count it as a good deed, and you won’t attract any attention from your tax examiner.
Notating a box of clothes worth $500 donated to Goodwill Industries doesn’t cut it. You have to detail: 2 pairs of pants each worth $30, 1 pair of shoes worth $15, etc. Again, it’s what it’s all worth when you donate it. If you give at church or a charity, get a statement verifying your cash contributions. And sending money to little Jose in Mexico City does not constitute a donation, it has to be a US-recognized charitable organization.
6) That “home office” deduction looks nice, isn’t it? Don’t bother. Back in the days when I worked in sales, my accountant said, “If you want some attention from the IRS, if you want an audit every few years, take your home office as a deduction.” I stopped doing it.
Your home office needs to be a place where you conduct actual business, and it usually needs to have a separate door that leads to the street, if it’s going to count. Turning an extra room in your house is not a “home office.” It’s where you go to do paperwork, and get some peace and quiet away from that nagging boyfriend of yours. Trust me, I know. For years I had a “home office” too. And a wife.
7) Sorry, but gay couples can’t file as married filing joint. This isn’t an IRS rule (remember, we don’t write the laws), it’s your lawmakers that decide these things. You both have to file separately. Don’t shoot the messenger.
8) There’s a hefty deduction called the Earned Income Credit, which can flag you for an audit. We see lots of people apply for this credit who don’t qualify. You can get if you 1) are related to a child and can prove it with a birth certificate that you are the mother/father, grandfather, uncle, brother/sister; 2) you lived under the same roof with the child for more than six months of the year. There are other requirements, but these are the two main ones. You say you lived with your boyfriend for three years, his kids call you Daddy, and you supported them? You’re not eligible unless you adopted the children. This is the biggest scenario we see.
9) Hurricane Katrina (and Wilma and Rita). Another can of worms. Best advice, go to IRS.gov, find the search window, type in “Katrina.” Among other things, it will produce Publication 4492 (you can Google “Publication 4492”). It explains what you can do. In a quick summary, If you donated to the Red Cross, or any recognized Katrina fund, this is deductible as a contribution. If you sent $300 to cousin Fred to get him out of town, its not. If you drove to New Orleans to pick cousin Fred up, your mileage counts as a deduction. And if you took cousin Fred and child into your home, there are allowances for deduction. But I’m not up on this yet, so look up the details on your own.
9) Keep receipts for everything. And mileage logs if you use your car for business. You have to be able to explain what they were for.
I had a woman who sent me receipts for a $40 thong, some videos and eye makeup. Possibly legitimate if she proved she was a hooker in a brothel, but she wouldn’t elaborate on why she needed them. We don’t care what you’re doing, we just want the tax you owe. I denied her deductions, she got a bill with interest and penalties.
I also had a woman in Beverly Hills deduct a $500 pair of little girl’s jeans. Her profession? She makes designer knock-off children’s clothes. After consulting with my gay son, and confirming that people in Beverly Hills really do buy their children $500 jeans, I allowed her deduction as a legitimate business expense. She was able to prove her claim. Although I think any lady who buys her kid $500 jeans should have her head examined.
10) If everyone filed their returns, reported their income honestly, and paid what they owed, we would balance the budget and come close to paying off the national debt within a few years. Bullshit provides us a lot of job security at IRS.
I hope this helps. Don’t screw around. Pay your damn taxes. That is all.