How to Pay Zero Taxes, 2006 23rd Edition

by SCHNEPPER JEFF A.

• ISBN13: 9780071460392
• ISBN10: 007146039X
• Edition: 23rd
• Format: Paperback
• Copyright: 2005-11-17
• Publisher: McGraw-Hill

Summary

Completely Updated: The ultimate guide to paying the IRS less--with the latest changes in the 2006 tax codes Totally updated for 2006, this unique tax guide focuses on tax saving, not tax preparation. Organized around all the IRS-sanctioned deductions, shelters, credits, and exemptions, "How to Pay Zero Taxes" stands apart from the crowd because it's easy to read, easy to apply, and it zeroes in on how you can save money in payments. Tax expert Jeff Schnepper includes comprehensive coverage of more deductions than any other tax book, including those related to child care and elder care, moving expenses, job hunting expenses, mortgages and points, investment expenses, and 401(k)s. "If there's a tax break allowed out there, it's in here."--"New York Daily News"

Table of Contents

Preface	xvii
Is It Legal?	1	(6)
How Our Tax System Works	7	(6)
Exclusions---Tax-Free Money	13	(56)
Alternatives to ``Earned Income''	15	(15)
Hospitalization Premiums	15	(1)
Group Life Insurance Premiums	16	(3)
Group Legal Services Plans	19	(1)
Accident and Health Plans	19	(1)
Employee Death Benefits	20	(1)
Merchandise Distributed to Employees on Holidays	20	(1)
``Expenses of Your Employer''	21	(1)
Meals and Lodgings	21	(2)
Employee Discounts	23	(1)
Workers' Compensation	23	(1)
``Cafeteria'' Plans	24	(1)
Dependent Care Assistance Program	24	(2)
Employer Educational Assistance	26	(1)
Employee Awards	27	(2)
Clergy Housing Allowance	29	(1)
Miscellaneous Fringe Benefits	29	(1)
Donative Items	30	(6)
Gifts, Bequests, and Inheritances	30	(1)
Scholarships and Fellowships	31	(3)
Prizes and Awards	34	(2)
Investors	36	(1)
Interest on State and Municipal Obligations	36	(1)
Benefits for the Elderly	37	(7)
Public Assistance Payments	37	(1)
Social Security and Other Retirement Benefits	37	(2)
Annuities	39	(4)
Sale of Your Home	43	(1)
Miscellaneous Individual Exclusions	44	(24)
Carpool Receipts	44	(1)
Damages	45	(2)
Divorce and Separation Arrangements	47	(4)
Life Insurance	51	(2)
Qualified State Tuition (§529) Programs	53	(12)
Your Home---The Mother of All Tax Shelters!	65	(3)
Schedule of Excludable Items	68	(1)
Credits---Dollar-for-Dollar Tax Reductions	69	(28)
Estimated Tax and Withholding Exemptions	70	(3)
Credits	73	(13)
The Earned Income Credit	73	(4)
Excess Social Security Tax	77	(1)
The Child and Dependent Care Credit	77	(7)
Credit for the Elderly or Permanently and Totally Disabled	84	(2)
Special Credits	86	(11)
Work Opportunity Credit (Formerly Targeted Jobs Tax Credit)	86	(1)
Welfare to Work Credit	87	(1)
Research Tax Credit	87	(1)
Orphan Drug Tax Credit	87	(1)
Adoption Assistance	88	(2)
Hope Scholarship Credit	90	(1)
Lifetime Learning Credit	90	(1)
Child Tax Credit	90	(1)
Disability Credits	91	(1)
Health Insurance Credit	92	(1)
Saver's Credit	92	(1)
Small Employer Credit	93	(1)
Electric Vehicle Credit	94	(1)
Credit for Residential Energy Efficient Property	94	(1)
Energy Saving Home Improvement Credit	94	(1)
Energy Efficient Appliances	95	(1)
Hybrid Vehicles Credit	95	(2)
``Above the Line'' Deductions	97	(76)
Deductions for Adjusted Gross Income	101	(72)
Trade and Business Deductions	101	(1)
Employee Business Expenses of Actors and Other Performing Artists	102	(1)
Employee Business Expenses	103	(1)
Alimony	103	(9)
Interest on Qualified Education Loans	112	(1)
Retirement Plan Payments	112	(50)
Self-Employment Tax	162	(1)
Health Insurance Deduction for Self-Employeds	162	(1)
Moving Expenses	163	(7)
Clean Fuel Vehicles	170	(1)
Deduction for Qualified Higher Education Expenses	171	(1)
Legal Fees	171	(1)
Classroom Materials	171	(2)
``Below the Line'' Deductions	173	(106)
The Importance of Filing Status	174	(4)
Tax Planning with Itemized Deductions	178	(94)
Medical Expenses	179	(20)
Income Taxes	199	(2)
Real Property Taxes	201	(1)
Personal Property Taxes	202	(1)
Interest	202	(20)
Charitable Contributions	222	(22)
Casualty Losses	244	(5)
Theft Losses	249	(8)
Miscellaneous Trade and Business Deductions of Employees	257	(1)
Travel Expenses	257	(6)
Transportation Expenses	263	(4)
Meals and Entertainment Expenses	267	(1)
Gifts	268	(2)
Reimbursable Employee Business Expenses	270	(1)
Educational Expenses	270	(1)
Limit on Itemized Deductions	271	(1)
Schedules of Deductions	272	(7)
Medical Deductions	272	(1)
Deductible Taxes	273	(1)
Charitable Deductions	274	(1)
Casualty and Theft Loss Deductions	275	(1)
Miscellaneous Deductions	276	(1)
Employee Miscellaneous Deductions	276	(1)
Investor Deductions	277	(2)
Traditional Tax Shelters	279	(64)
Deferral and Leverage	296	(40)
Real Estate	296	(13)
Fees in Public Real Estate Partnerships	309	(1)
Oil and Gas	309	(10)
Equipment Leasing	319	(4)
Single-Premium Life Insurance	323	(4)
Cattle Feeding Programs	327	(2)
Cattle Breeding Programs	329	(2)
Tax Straddles	331	(2)
Art Reproduction	333	(1)
Noncash Gift Shelters	334	(1)
Municipal Bond Swaps	335	(1)
How to Analyze a Tax Shelter	336	(7)
Getting Out of the Tax Shelter	338	(1)
Master Limited Partnerships	339	(3)
Abusive Shelters	342	(1)
Super Tax Shelters	343	(62)
Family Shifts	344	(25)
Unearned Income of Minor Children	347	(3)
Outright Gifts	350	(5)
Clifford Trusts	355	(1)
Interest-Free Loans	355	(1)
The Schnepper Shelter: Gift Leasebacks	355	(6)
The Schnepper Deep Shelter	361	(1)
Family Partnerships	362	(1)
Family Trusts	362	(1)
The Schnepper Malagoli Super Shelter	363	(2)
Employing Members of the Family	365	(3)
Author's Delight	368	(1)
Running Your Own Business	369	(36)
Your Home	372	(13)
Your Car	385	(2)
Meals and Entertainment	387	(4)
Travel and Vacation	391	(6)
Gifts	397	(1)
Advertising	398	(1)
Deductible Clothes	398	(1)
Creative Deductions---Busting the IRS	398	(1)
Medical Premiums	399	(1)
Borrowing from Your Company	399	(3)
Miscellaneous Corporate Advantages	402	(3)
Investment Planning to Save Taxes	405	(36)
Short Sales	410	(1)
Broad-Based Index Options and Regulated Futures Contracts (RFCs)	411	(1)
Wash Sales	412	(1)
Premiums on Taxable and Tax-Exempt Bonds	412	(1)
Original Issue Discount (OID)---Taxable Bonds	413	(1)
Original Issue Discount (OID)---Tax-Exempt Bonds	413	(1)
Market Discount	413	(1)
Municipal Bond Swaps	414	(1)
Employee Options---Non-Qualified	415	(1)
Incentive Stock Options	416	(4)
Year-End Stock Sales	420	(1)
Fund Strategies	420	(1)
Dividends	421	(2)
Tax-Exempt Income	423	(2)
Special Report	425	(1)
Old Prices	426	(1)
Alternative Minimum Tax for Individuals	426	(12)
U.S. Savings Bond Exclusion	438	(3)
Last-Minute Tax Planning	441	(14)
Defer Taxes	442	(2)
Accelerate Expenses	444	(1)
Accelerate Special Deductions	445	(1)
Dependents and Personal Exemptions	446	(3)
Phaseout of Exemptions	449	(1)
Timing Strategies	450	(1)
Retirement Plans	450	(1)
Individual Retirement Plans (IRAs)	451	(1)
H.R. 10 or Keogh Plans	451	(1)
Marital Status	452	(1)
The Goldinger Deferral	453	(2)
The Attorneys' and Accountants' Relief Act of 1993	455	(16)
Training and Investment Provisions	457	(1)
Investment Incentives	458	(1)
Expansion and Simplification of Earned Income Tax Credit	459	(1)
Real Estate Provisions	459	(2)
Miscellaneous Provisions	461	(1)
Revenue-Raising Provisions	462	(6)
Business Provisions	468	(3)
Stealth Tax Reform	471	(24)
The New Taxpayer Bill of Rights	472	(4)
Personal Responsibility and Work Opportunity Reconciliation Act of 1996, HR 3734	476	(1)
The Health Insurance Portability and Accountability Act of 1996, HR 3103	477	(4)
The Small Business Job Protection Act of 1996, HR 3448	481	(12)
Tax Relief for Bosnian Effort	493	(2)
Tax Reform---Again!	495	(12)
The Mind-Numbing Complexity of the Tax Reconciliation Act of 1997, Also Known as the Taxpayer Relief Act of 1997	496	(11)
The Internal Revenue Service Restructuring and Reform Act of 1998	507	(10)
IRS Reorganization	508	(1)
IRS Governance and Oversight Changes	508	(2)
Extension of Attorney-Client Privilege to Tax Advice	510	(1)
Burden of Proof Shifted to IRS in Certain Civil Tax Cases	511	(1)
Taxpayer Rights	511	(2)
Roth IRA Conversion/Loophole	513	(1)
Capital Gains	513	(1)
Venture Capital	514	(1)
Home Sales Clarification	514	(1)
Conclusion	515	(2)
The Economic Growth and Tax Relief Reconciliation Act of 2001	517	(32)
Marginal Rate Reductions	518	(1)
Individual Income Tax Rate Structure	518	(2)
Phaseout of Restrictions on Personal Exemptions	520	(1)
Phaseout of Itemized Deductions	521	(2)
Tax Benefits Relating to Children	523	(1)
Increase and Expand the Child Tax Credit	523	(1)
Extension and Expansion of Adoption Tax Benefits	524	(1)
Child Care Credit	524	(1)
Marriage Penalty Relief Provisions	524	(1)
Standard Deduction Marriage Penalty Relief	524	(1)
Expansion of the 15 Percent Rate Bracket for Married Couples Filing Joint Returns	525	(2)
Marriage Penalty Relief and Simplification Relating to the Earned Income Credit	527	(1)
Education Incentives	527	(1)
Modifications to Education IRAs	527	(1)
Private Prepaid Tuition Programs	528	(1)
Exclusion for Employer-Provided Educational Assistance	529	(1)
Modifications to Student Loan Interest Deduction	529	(1)
Eliminate Tax on Awards Under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program	530	(1)
Deduction for Qualified Higher Education Expenses	530	(10)
Pension and Individual Retirement Arrangement Provisions	531	(8)
AMT Relief	539	(1)
Health Insurance for Self-Employed	539	(1)
Income Tax Treatment for Certain Restitution Payments to Holocaust Victims	539	(1)
Estate, Gift, and Generation-Skipping Transfer Tax Provisions	540	(1)
Phaseout and Repeal of Estate and Generation-Skipping Transfer Taxes	540	(3)
Expand Estate Tax Rule for Conservation Easements	543	(1)
Modify Generation-Skipping Transfer Tax Rules	543	(1)
Availability of Installment Payment Relief	543	(6)
Sunset	545	(4)
The Job Creation and Worker Assistance Act of 2002	549	(4)
Bonus Depreciation	550	(1)
Net Operating Losses	550	(1)
Classroom Materials	550	(1)
Electric Vehicle Credit	550	(1)
Work Opportunity Tax Credit	551	(1)
Welfare to Work Tax Credit	551	(1)
Archer Medical Savings Account	551	(1)
Liberty Zone Benefits	551	(2)
The Tax Relief Reconciliation Act of 2003	553	(10)
Rate Reductions	554	(1)
The Marriage Penalty	555	(1)
The Alternative Minimum Tax	555	(1)
Child Tax Credit	556	(1)
Dividends/Capital Gains	556	(2)
Deduct Your SUV---Election to Expense	558	(5)
Hurricane Tax Breaks	563	(4)
How to Avoid/Survive an IRS Audit	567	(102)
Appendix A Cost Recovery/Depreciation	669	(14)
Appendix B Law Prior to the Tax Reform Act of 1986	683	(4)
Appendix C Law After March 14, 1984 (Real Estate)	687	(12)
Appendix D Business Use of ``Listed Property''	699	(8)
Appendix E Auto Leases	707	(76)
Index	783