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Old 03-20-2014, 04:17 PM   #21
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If you have the documentation, I don't see any problem with that.
Tax Topics - Topic 506 Charitable Contributions

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Old 03-20-2014, 08:19 PM   #22
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Originally Posted by kgtest View Post
Well I took a stab at my taxes, and then I had my ole man review them as well.

My question is this, I was going to report business income to push me into the 7.60% income tax range for HI. Instead of taking that loss, I feel my audit risk would likely be less if I just included some more of my charitable contributions.

Do you guys feel that donating $4,000 worth of items after selling a 2000sq ft home and relocating to the pacific would be a questionable donation amount to the IRS?

I included the basics that I donated to Good Will (with proof) but I feel I can include the littler things (100s of books, cds, smaller furniture items and household goods that easily total about 1500-2000).

I am curious if this is a better plan than reporting some piddly consulting income.
I would never shy away from taking legitimate deductions. You have the documentation, so take it and be able to prove it if audited. i agree an audit is not desired, but you should do everything that is legal under the law. Why pay more than you are legally obligated to?

Can your consulting income just be included as "other income"? Avoid the whole Sch C business form. Can you also take home office deduction with the consulting business as another legal deduction?

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Old 03-20-2014, 09:37 PM   #23
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All quite simply done with Turbotax.
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Old 03-21-2014, 01:24 PM   #24
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As a tax preparer, I can say that TurboTax et. al. is great for 'doing taxes' but a pro can help with tax planning. I've also looked over many TT returns and while the input is correct, the output could've been better i.e. 1099B's (stock sales) where the basis is not given or incomplete/incorrect resulting in higher taxes. Surprisingly many people don't understand the forms and just input the numbers given. "GIGO"
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Old 03-21-2014, 09:27 PM   #25
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Watch the home business deductions if you decide to do it. Yes, you can depreciate the part of the house you use for business as well as expenses (roof, driveway...) as part of the upkeep of the house. But beware when it comes time to sell the house as there could be capital gains tax to pay on the portion of the house you were depreciating. We learned that the hard way after 16 years of home expense depreciation and then selling at a profit.

Disclaimer: I am NOT a tax accountant nor adviser. Just a guy that learned through personal experiences.

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