How to Pay Zero Taxes

by Jeff A. Schnepper

• ISBN13: 9780071352468
• ISBN10: 0071352465
• Edition: 17th
• Format: Paperback
• Copyright: 1999-11-01
• Publisher: McGraw-Hill Companies, Inc.

Summary

Fully updated with all the latest tax changes as of October 1999, this annual guide delivers tax-saving tips and practical strategies consumers can use to lower their taxes this year, next year, and beyond.

Table of Contents

Preface
Is It legal?	1	(10)
How Our Tax System Works	11	(6)
Exclusions---Tax-Free Money	17	(44)
Alternatives to ``Earned Income''	19	(15)
Hospitalization Premiums	19	(1)
Group Life Insurance Premiums	20	(3)
Group Legal Services Plans	23	(1)
Accident and Health Plans	23	(1)
Employee Death Benefits	24	(1)
Merchandise Distributed to Employees on Holidays	24	(1)
``Expenses of Your Employer''	25	(1)
Meals and Lodgings	25	(2)
Employee Discounts	27	(1)
Workers' Compensation	27	(1)
``Cafeteria'' Plans	28	(1)
Dependent Care Assistance Program	28	(2)
Employer Educational Assistance	30	(1)
Employer Awards	30	(3)
Miscellaneous Fringe Benefits	33	(1)
Donative Items	34	(5)
Gifts, Bequests, and Inheritances	34	(1)
Scholarships and Fellowships	35	(3)
Prizes and Awards	38	(1)
Investors	39	(1)
Interest on State and Municipal Obligations	39	(1)
Benefits for the Elderly	40	(10)
Public Assistance Payments	40	(1)
Social Security and Other Retirement Benefits	41	(2)
Retirement Annuities	43	(3)
Sale of Your Home	46	(3)
Buying Your Own Home---Twice!---The Schnepper Bootstrap	49	(1)
Miscellaneous Individual Exclusions	50	(9)
Carpool Receipts	50	(1)
Damages	51	(2)
Divorce and Separation Arrangements	53	(4)
Life Insurance	57	(1)
Qualified State Tuition Programs	58	(1)
Schedule of Excludable Items	59	(2)
Credits---Dollar-for-Dollar Tax Reductions	61	(24)
Estimated Tax and Withholding Exemptions	62	(4)
Credits	66	(13)
The Earned Income Credit	66	(3)
Excess Social Security Tax	69	(1)
The Child and Dependent Care Credit	69	(2)
Child Care Credits for Children of Divorced or separated Parents	71	(5)
Credit for the Elderly or Permanently and Totally Disabled	76	(2)
Credit for Interest Paid on Mortgage Credit Certificates	78	(1)
Special Credits	79	(6)
Work Opportunity Credit (Formerly Targeted Jobs Tax Credit)	79	(1)
Welfare to Work Credit	80	(1)
Research Tax Credit	80	(1)
Orphan Drug Tax Credit	80	(1)
Adoption Assistance	81	(1)
Hope Scholarship Credit	82	(1)
Lifetime Learning Credit	82	(1)
Child Tax Credit	83	(1)
District of Columbia-First Time Homebuyer	83	(2)
``Above the Line'' Deductions	85	(58)
Deductions for Adjusted Gross Income	89	(54)
Trade and Business Deductions	89	(1)
Employee Business Expenses of Actors and Other Performing Artists	90	(1)
Employee Business Expenses	90	(1)
Alimony	91	(8)
Interest on Qualified Education Loans	99	(1)
Retirement Plan Payments	100	(32)
Self-Employment Tax	132	(1)
Health Insurance Deduction for Self-Employeds	133	(1)
Moving Expenses	133	(10)
``Below the Line'' Deductions	143	(104)
The Importance of Filing Status	144	(5)
Tax Planning with Itemized Deductions	149	(90)
Medical Expenses	149	(17)
Income Taxes	166	(1)
Real Property Taxes	167	(2)
Personal Property Taxes	169	(1)
Interest	169	(20)
Charitable Contributions	189	(22)
Casualty Losses	211	(5)
Theft losses	216	(8)
Miscellaneous Trade and Business Deductions of Employees	224	(1)
Travel Expenses	224	(6)
Transportation Expenses	230	(4)
Meals and Entertainment Expenses	234	(1)
Gifts	235	(2)
Reimbursable Employee Business Expenses	237	(1)
Educational Expenses	237	(1)
Limit on Itemized Deductions	238	(1)
Schedules of Deductions	239	(8)
Medical Deductions	239	(1)
Deductible Deductions	240	(1)
Charitable Deductions	241	(1)
Casualty and Theft Loss Deductions	242	(1)
Miscellaneous Deductions	242	(1)
Employee Miscellaneous Deductions	243	(1)
Investor Deductions	244	(3)
Traditional Tax Shelters	247	(64)
Deferral and Leverage	264	(40)
Real Estate	264	(13)
Fees in Public Real Estate Partnerships	277	(1)
Oil and Gas	277	(10)
Equipment Leasing	287	(4)
Single-Premium Life Insurance	291	(4)
Cattle Feeding Programs	295	(2)
Cattle Breeding Programs	297	(2)
Tax Straddles	299	(2)
Art Reproduction	301	(1)
Noncash Gift Shelters	302	(1)
Municipal Bond Swaps	303	(1)
How to Analyze a Tax Shelter	304	(7)
Getting Out of the Tax Shelter	306	(1)
Master Limited Partnerships	307	(4)
Super Tax Shelters	311	(62)
Family Shifts	312	(23)
Unearned Income of Minor Children	315	(4)
Outright Gifts	319	(4)
Clifford Trusts	323	(1)
Interest-Free Loans	324	(1)
The Schnepper Shelter: Gift Leasebacks	324	(6)
The Schnepper Deep Shelter	330	(1)
Family Partnerships	331	(1)
Family Trusts	331	(1)
Employing Members of the Family	332	(2)
Author's Delight	334	(1)
Running Your Own Business	335	(38)
Your Home	338	(12)
Your Car	350	(3)
Meals and Entertainment	353	(4)
Travel and Vacation	357	(6)
Gifts	363	(1)
Advertising	364	(1)
Deductible Clothes	364	(1)
Creative Deductions---Busting the IRS	364	(1)
Medical Premiums	365	(1)
Borrowing from Your Company	365	(3)
Lending to Your Company	368	(1)
Miscellaneous Corporate Advantages	369	(4)
Investment Planning to Save Taxes	373	(32)
Short Sales	378	(1)
Broad-Based Index Options and Regulated Futures Contracts (RFCs)	379	(1)
Wash Sales	379	(1)
Premiums on Taxable and Tax-Exempt Bonds	380	(1)
Original Issue Discount (OID)---Taxable Bonds	380	(1)
Original Issue Discount (OID)---Tax-Exempt Bonds	380	(1)
Market Discount	381	(1)
Municipal Bond Swaps	381	(1)
Employee Options---Non-Qualified	382	(1)
Incentive Stock Options	383	(3)
Year-End Stock Sales	386	(1)
Tax-Exempt Income	387	(2)
Special Report	389	(1)
Alternative Minimum Tax for Individuals	389	(12)
U.S. Savings Bond Exclusion	401	(4)
Last-Minute Tax Planning	405	(16)
Defer Taxes	406	(2)
Accelerate Expenses	408	(1)
Accelerate Special Deductions	409	(1)
Dependents and Personal Exemptions	409	(4)
Phaseout of Exemptions	413	(1)
Timing Strategies	413	(1)
Retirement Plans	414	(1)
Individual Retirement Plans (IRAs)	414	(1)
H.R. 10 or Keogh Plans	415	(1)
Marital Status	416	(1)
The Goldinger Deferral	417	(1)
Educational Tax Incentives	417	(4)
The Attorneys' and Accountants' Relief Act of 1993	421	(16)
Training and Investment Provisions	423	(1)
Investment Incentives	424	(1)
Expansion and Simplification of Earned Income Tax Credit	425	(1)
Real Estate Provisions	425	(2)
Miscellaneous Provisions	427	(1)
Revenue-Raising Provisions	428	(6)
Business Provisions	434	(3)
Stealth Tax Reform	437	(24)
The New Taxpayer Bill of Rights	438	(4)
Personal Responsibility and Work Opportunity Reconciliation Act of 1996, HR 3734	442	(1)
The Health Insurance Portability and Accountability Act of 1996, HR 3103	443	(4)
The Small Business Job Protection Act of 1996, HR 3448	447	(12)
Tax Relief for Bosnian Effort	459	(2)
Tax Reform---Again!	461	(12)
The Mind-Numbing Complexity of the Tax Reconciliation Act of 1997, Also Known as the Taxpayer Relief Act of 1997	462	(11)
The Internal Revenue Service Restructuring and Reform Act of 1998	473	(10)
IRS Reorganization	474	(1)
IRS Governance and Oversight Changes	474	(2)
Extension of Attorney-Client Privilege to Tax Advice	476	(1)
Burden of Proof Shifted to IRS in Certain Civil Tax Cases	477	(1)
Taxpayer Rights	477	(2)
Roth IRA Conversion/Loophole	479	(1)
Capital Gains	479	(1)
Venture Capital	480	(1)
Home Sales Clarification	480	(1)
Conclusion	481	(2)
How to Avoid/Survive an IRS Audit	483	(82)
Appendix A Cost Recovery/Depreciation	565	(14)
Appendix B Law Prior to the Tax Reform Act of 1986	579	(4)
Appendix C Law After March 14, 1984 (Real Estate)	583	(12)
Appendix D Business Use of ``Listed Property''	595	(8)
Appendix E Auto Leases	603	(36)
Index	639