How to Pay Zero Taxes, 2004

by Schnepper, Jeff A.

• ISBN13: 9780071427296
• ISBN10: 0071427295
• Edition: 21st
• Format: Paperback
• Copyright: 2003-11-21
• Publisher: MCG

Summary

How to Pay Zero Taxes guides you through the ins and outs of every IRS-sanctioned tax-saving strategy available for preserving income. From converting personal expenses into business expenses to obtaining tax credits for dependent care to setting up tax-slashing trusts to avoiding or surviving an IRS audit Book jacket.

Author Biography

Jeff A. Schnepper runs a full-time accounting and legal practice and is financial, tax, and legal adviser to the Transamerica sales force. He has written all previous editions of How to Pay Zero Taxes plus several other books on personal finance and taxation.

Table of Contents

Preface	xvii
Is It Legal?	1	(8)
How Our Tax System Works	9	(6)
Exclusions--Tax-Free Money	15	(54)
A Alternatives to ``Earned Income''	17	(15)
Hospitalization Premimus	17	(1)
Group Life Insurance Premiums	17	(4)
Group Legal Services Plans	21	(1)
Accident and Health Plans	21	(1)
Employee Death Benefits	22	(1)
Merchandise Distributed to Employees on Holidays	22	(1)
``Expenses of Your Employer''	23	(1)
Meals and Lodgings	23	(2)
Employee Discounts	25	(1)
Workers' Compensation	25	(1)
``Cafeteria'' Plans	26	(1)
Dependent Care Assistance Program	26	(2)
Employer Educational Assistance	28	(1)
Employee Awards	28	(3)
Clergy Housing Allowance	31	(1)
Miscellaneous Fringe Benefits	31	(1)
Donative Items	32	(5)
Gifts, Bequests, and Inheritances	32	(1)
Scholarships and Fellowships	33	(3)
Prizes and Awards	36	(1)
Investors	37	(1)
Interest on State and Municipal Obligations	37	(1)
Benefits for the Elderly	38	(7)
Public Assistance Payments	38	(1)
Social Security and Other Retirement Benefits	38	(3)
Annuities	41	(3)
Sale of Your Home	44	(1)
Miscellaneous Individual Exclusions	45	(21)
Carpool Receipts	45	(1)
Damages	46	(2)
Divorce and Separation Arrangements	48	(4)
Life Insurance	52	(2)
Qualified State Tuition (§529) Programs	54	(10)
Your Home--The Mother of All Tax Shelters!	64	(2)
Schedule of Excludable Items	66	(3)
Credits---Dollar-for-Dollar Tax Reductions	69	(28)
Estimated Tax and Withholding Exemptions	70	(3)
Credits	73	(14)
The Earned Income Credit	73	(3)
Excess Social Security Tax	76	(1)
The Child and Dependent Care Credit	77	(1)
Child Care Credits for Children of Divorced or Separated Parents	78	(6)
Credit for the Elderly or Permanently and Totally Disabled	84	(2)
Credit for Interest Paid on Mortgage Credit Certificates	86	(1)
Special Credits	87	(10)
Work Opportunity Credit (Formerly Targeted Jobs Tax Credit)	87	(1)
Welfare to Work Credit	88	(1)
Research Tax Credit	88	(1)
Orphan Drug Tax Credit	88	(1)
Adoption Assistance	89	(2)
Hope Scholarship Credit	91	(1)
Lifetime Learning Credit	91	(1)
Child Tax Credit	91	(1)
District of Columbia--First Time Homebuyer	92	(1)
Disability Credits	93	(1)
Health Insurance Credit	93	(1)
Saver's Credit	94	(1)
Small Employer Credit	95	(2)
``Above the Line'' Deductions	97	(68)
Deductions for Adjusted Gross Income	101	(64)
Trade and Business Deductions	101	(1)
Employee Business Expenses of Actors and Other Performing Artists	102	(1)
Employee Business Expenses	102	(1)
Alimony	103	(8)
Interest on Qualified Education Loans	111	(1)
Retirement Plan Payments	112	(42)
Self-Employment Tax	154	(1)
Health Insurance Deduction for Self-Employeds	155	(1)
Moving Expenses	155	(8)
Clean Fuel Vehicles	163	(1)
Deduction for Qualified Higher Education Expenses	163	(2)
``Below the Line'' Deductions	165	(102)
The Importance of Filing Status	166	(5)
The Planning with Itemized Deductions	171	(89)
Medical Expenses	171	(17)
Income Taxes	188	(1)
Real Property Taxes	189	(2)
Personal Property Taxes	191	(1)
Interest	191	(20)
Charitable Contributions	211	(22)
Casualty Losses	233	(4)
Theft Losses	237	(8)
Miscellaneous Trade and Business Deductions of Employees	245	(1)
Travel Expenses	246	(5)
Transportation Expenses	251	(4)
Meals and Entertainment Expenses	255	(1)
Gifts	256	(2)
Reimbursable Employee Business Expenses	258	(1)
Educational Expenses	258	(1)
Limit on Itemized Deductions	259	(1)
Schedules of Deductions	260	(7)
Medical Deductions	260	(1)
Deductible Taxes	261	(1)
Charitable Deductions	262	(1)
Casualty and Theft Loss Deducations	263	(1)
Miscellaneous Deductions	263	(1)
Employee Miscellaneous Deductions	264	(1)
Investor Deductions	265	(2)
Traditional Tax Shelters	267	(64)
Deferral and Leverage	284	(40)
Real Estate	284	(13)
Fees in Public Real Estate Partnerships	297	(1)
Oil and Gas	297	(10)
Equipment Leasing	307	(4)
Single-Premium Life Insurance	311	(4)
Cattle Feeding Programs	315	(2)
Cattle Breeding Programs	317	(2)
Tax Straddles	319	(2)
Art Reproduction	321	(1)
Noncash Gift Shelters	322	(1)
Municipal Bond Swaps	323	(1)
How to Analyze a Tax Shelter	324	(7)
Getting Out of the Tax Shelter	326	(1)
Master Limited Partnerships	327	(3)
Abusive Shelters	330	(1)
Super Tax Shelters	331	(64)
Family Shifts	332	(25)
Unearned Income of Minor Children	335	(4)
Outright Gifts	339	(4)
Clifford Trusts	343	(1)
Interest-Free Loans	344	(1)
The Schnepper Shelter: Gift Leasebacks	344	(6)
The Schnepper Deep shelter	350	(1)
Family Partnerships	350	(1)
Family Trusts	351	(1)
The Schnepper Malagoli Super Shelter	352	(2)
Employing Members of the Family	354	(3)
Author's Delight	357	(1)
Running Your Own Business	357	(38)
Your Home	361	(12)
Your Car	373	(2)
Meals and Entertainment	375	(4)
Travel and Vacation	379	(6)
Gifts	385	(1)
Advertising	386	(1)
Deductible Clothes	386	(1)
Creative Deductions--Busting the IRS	386	(1)
Medical Premiums	387	(1)
Borrowing from Your Company	387	(3)
Lending to Your Company	390	(1)
Miscellaneous Corporate Advantages	391	(4)
Investment Planning to Save Taxes	395	(36)
Short Sales	400	(1)
Broad-Based Index Options and Regulated Futures Contracts (RFCs)	401	(1)
Wash Sales	402	(1)
Premiums on Taxable and Tax-Exempt Bonds	402	(1)
Original Issue Discount (OID)--Taxable Bonds	403	(1)
Original Issue Discount (OID)--Tax-Exempt Bonds	403	(1)
Market Discount	403	(1)
Municipal Bond Swaps	404	(1)
Employee Options--Non-Qualified	405	(1)
Incentive Stock Options	406	(4)
Year-End Stock Sales	410	(1)
Fund Strategies	410	(1)
Dividends	411	(2)
Tax-Exempt Income	413	(2)
Special Report	415	(1)
Old Prices	416	(1)
Alternative Minimum Tax for Individuals	416	(12)
U.S. Savings Bond Exclusion	428	(3)
Last-Minute Tax Planning	431	(14)
Defer Taxes	432	(2)
Accelerate Expenses	434	(1)
Accelerate Special Deductions	435	(1)
Dependents and Personal Exemptions	435	(4)
Phaseout of Exemptions	439	(1)
Timing Strategies	439	(1)
Retirement Plans	440	(1)
Individual Retirement Plans (IRAs)	440	(1)
H.R. 10 or Keogh Plans	441	(1)
Marital Status	442	(1)
The Goldinger Deferral	443	(2)
The Attorneys' and Accountants' Relief Act of 1993	445	(16)
Training and Investment Provisions	447	(1)
Investment Incentives	448	(1)
Expansion and Simplification of Earned Income Tax Credit	449	(1)
Real Estate Provisions	449	(2)
Miscellaneous Provisions	451	(1)
Revenue-Raising Provisions	452	(6)
Business Provisions	458	(3)
Stealth Tax Reform	461	(24)
The New Taxpayer Bill of Rithts	462	(4)
Personal Responsibility and Work Opportunity Reconciliation Act of 1996, HR 3734	466	(1)
The Health Insurance Portability and Accountability Act of 1996, HR 3103	467	(4)
The Small Business Job Protection Act of 1996, HR 3448	471	(12)
Tax Relief for Bosnian Effort	483	(2)
Tax Reform--Again!	485	(12)
The Mind-Numbing complexity of the Tax Reconciliation Act of 1997, Also Known as the Taxpayer Relief Act of 1997	486	(11)
The Internal Revenue Service Restructuring and Reform Act of 1998	497	(10)
IRS Reorganization	498	(1)
IRS Governance and Oversight Changes	498	(2)
Extension of Attorney-Client Privilege to Tax Advice	500	(1)
Burden of Proof Shifted to IRS in Certain Civil Tax Cases	501	(1)
Taxpayer Rights	501	(2)
Roth IRA Conversion/Loophole	503	(1)
Capital Gains	503	(1)
Venture Capital	504	(1)
Home Sales Clarification	504	(1)
Conclusion	505	(2)
The Economic Growth and Tax Relief Reconciliation Act of 2001	507	(32)
Marginal Rate Reductions	508	(5)
Tax Benefits Relating to Children	513	(1)
Marriage Penalty Relief Provisions	514	(3)
Education Incentives	517	(4)
Pension and Individual Retirement Arrangement Provisions	521	(8)
AMT Relief	529	(1)
Health Insurance for Self-Employed	529	(1)
Income Tax Treatment for Certain Restitution Payments to Holocaust Victims	529	(1)
Estate, Gift, and Generation-Skipping Transfer Tax Provisions	530	(5)
Sunset	535	(4)
The Job Creation and Worker Assistance Act of 2002	539	(4)
Bonus Depreciation	540	(1)
Net Operating Losses	540	(1)
Classroom Materials	540	(1)
Electric Vehicle Credit	540	(1)
Work Opportunity Tax Credit	541	(1)
Welfare to Work Tax Credit	541	(1)
Archer Medical Savings Account	541	(1)
Liberty Zone Benefits	541	(2)
The Tax Relief Reconciliation Act of 2003	543	(10)
Rate Reductions	544	(1)
The Marriage Penalty	545	(1)
The Alternative Minimum Tax	545	(1)
Child Tax Credit	546	(1)
Dividends/Capital Gains	546	(3)
Deduct Your SUV---Election to Expense	549	(4)
How to Avoid/Survive an IRS Audit	553	(104)
Appendix A Cost Recovery/Depreciation	657	(14)
Appendix B Law Prior to the Tax Reform Act of 1986	671	(4)
Appendix C Law After March 14, 1984 (Real Estate)	675	(12)
Appendix D Business Use of ``Listed Property''	687	(8)
Appendix E Auto Leases	695	(50)
Index	745