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How to Pay Zero Taxes 2015: Your Guide to Every Tax Break the IRS Allows

Book Description

The revised, updated edition of the popular guide that helps you save thousands at tax time

How to Pay Zero Taxes 2015 provides simple strategies that are sure to save readers money--this year, next year, and beyond. From converting personal expenses into business deductions to avoiding--or surviving--an IRS audit, Jeff Schnepper's guide covers more deductions than any other tax book, all conveniently organized into six easy-access categories: exclusions, general deductions, "below the line" deductions, traditional tax shelters, and super tax shelters.

Jeff A. Schnepper, Esq., is the author of multiple books on finance and taxation, including all previous editions of How to Pay Zero Taxes. He is a financial, tax, and legal advisor for Estate Planning of Delaware Valley and operates a tax, accounting, and legal practice in Cherry Hill, New Jersey. Mr. Schnepper is Microsoft's MSN MONEY tax expert, an economics editor for USA Today, and tax counsel for Haran, Watson & Company.

Table of Contents

  1. Cover
  2. Tilte Page
  3. Copyright Page
  4. Dedication
  5. Contents
  6. Acknowledgments
  7. Chapter 1 Tax Insanity
  8. Chapter 2 Is It Legal?
  9. Chapter 3 How Our Tax System Works
  10. Chapter 4 Exclusions—Tax-Free Money
    1. A Alternatives to “Earned Income”
      1. 1. Hospitalization Premiums
      2. 2. Group Life Insurance Premiums
      3. 3. Group Legal Services Plans
      4. 4. Accident and Health Plans
      5. 5. Employee Death Benefits
      6. 6. Merchandise Distributed to Employees on Holidays
      7. 7. “Expenses of Your Employer”
      8. 8. Meals and Lodgings
      9. 9. Employee Discounts
      10. 10. Workers’ Compensation
      11. 11. “Cafeteria” Plans and Flexible Spending Accounts
      12. 12. Dependent Care Assistance Program
      13. 13. Employer Educational Assistance
      14. 14. Employee Awards
      15. 15. Clergy Housing Allowance
      16. 16. Miscellaneous Fringe Benefits
    2. B Donative Items
      1. 17. Gifts, Bequests, and Inheritances
      2. 18. Scholarships and Fellowships
      3. 19. Prizes and Awards
      4. 20. Qualified Charitable Distributions (QCDs)
    3. C Investors
      1. 21. Interest on State and Municipal Obligations
    4. D Benefits for the Elderly
      1. 22. Public Assistance Payments
      2. 23. Social Security and Other Retirement Benefits
      3. 24. Annuities
      4. 25. Sale of Your Home
    5. E Miscellaneous Individual Exclusions
      1. 26. Carpool Receipts
      2. 27. Damages
      3. 28. Divorce and Separation Arrangements
      4. 29. Life Insurance
      5. 30. Qualified State Tuition (§529) Programs
      6. 31. Your Home—The Mother of All Tax Shelters!
      7. 32. Disabled Veteran Payments
      8. 33. Exclusion of Income for Volunteer Firefighters and Emergency Medical Responders
      9. 34. Unemployment Benefits
      10. 35. Homeowner Security
      11. 36. Reimbursed Costs to Parents of Children with Disabilities
      12. 37. Wrongful Conviction and Incarceration
      13. 38. Restitution Payments
      14. 39. Frequent Flier Miles
      15. 40. Hurricane Sandy
      16. 41. Cancellation of Indebtedness
      17. 42. Medicaid Payments for Foster Care of Related Individuals
    6. F Schedule of Excludable Items
  11. Chapter 5 Credits—Dollar-for-Dollar Tax Reductions
    1. A Estimated Tax and Withholding Exemptions
    2. B Credits
      1. 43. The Earned Income Credit
      2. 44. Excess Social Security Tax
      3. 45. The Child and Dependent Care Credit
      4. 46. Credit for the Elderly or Permanently and Totally Disabled
    3. C Special Credits
      1. 47. Work Opportunity Credit (Formerly Targeted Jobs Tax Credit)
      2. 48. Welfare to Work Credit
      3. 49. Research Tax Credit
      4. 50. Orphan Drug Tax Credit
      5. 51. Adoption Assistance
      6. 52. Hope Scholarship Credit
      7. 53. American Opportunity Tax Credit
      8. 54. Lifetime Learning Credit
      9. 55. Child Tax Credit
      10. 56. Disability Credits
      11. 57. Health Insurance Credit
      12. 58. Saver’s Credit
      13. 59. Small Employer Credit
      14. 60. Electric Vehicle Credit
      15. 61. Credit for Residential Energy Efficient Property
      16. 62. Energy Saving Home Improvement Credit
      17. 63. Hybrid Vehicles Credit
      18. 64. Telephone Tax Refund
      19. 65. First-Time Home Buyer Credit
      20. 66. “Making Work Pay” Tax Credit
      21. 67. Plug-in Electric Drive Vehicle Credit
      22. 68. Plug-in Electric Vehicle Credit
      23. 69. Conversion Kits
      24. 70. Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed against AMT
      25. 71. Small Business Health Insurance Credit
      26. 72. Foreign Tax Credit
      27. 73. The Premium Tax Credit
  12. Chapter 6 “Above the Line” Deductions
    1. A Deductions for Adjusted Gross Income
      1. 74. Trade and Business Deductions
      2. 75. Employee Business Expenses of Actors and Other Performing Artists
      3. 76. Employee Business Expenses
      4. 77. Alimony
      5. 78. Interest on Qualified Education Loans
      6. 79. Retirement Plan Payments
      7. 80. Self-Employment Tax
      8. 81. Health Insurance Deduction for Self-Employeds
      9. 82. Moving Expenses
      10. 83. Clean Fuel Vehicles
      11. 84. Deduction for Qualified Higher Education Expenses—Tuition and Fees
      12. 85. Legal Fees
      13. 86. Classroom Materials
      14. 87. Medical Savings Accounts (Archer Medical Savings Accounts)
      15. 88. Health Savings Accounts
      16. 89. Sales Tax Deduction on Motor Vehicles
  13. Chapter 7 “Below the Line” Deductions
    1. A The Importance of Filing Status
    2. B Tax Planning with Itemized Deductions
      1. 90. Medical Expenses
      2. 91. Income Taxes
      3. 92. Real Property Taxes
      4. 93. Personal Property Taxes
      5. 94. Interest
      6. 95. Mortgage Insurance
      7. 96. Charitable Contributions
      8. 97. Casualty Losses
      9. 98. Theft Losses
      10. 99. Miscellaneous Trade and Business Deductions of Employees
      11. 100. Job Loss Insurance
      12. 101. Travel Expenses
      13. 102. Transportation Expenses
      14. 103. Meals and Entertainment Expenses
      15. 104. Gifts
      16. 105. Reimbursable Employee Business Expenses
      17. 106. Educational Expenses
      18. 107. Limit on Itemized Deductions
    3. C Schedules of Deductions
      1. 108. Medical Deductions
      2. 109. Deductible Taxes
      3. 110. Charitable Deductions
      4. 111. Casualty and Theft Loss Deductions
      5. 112. Miscellaneous Deductions
      6. 113. Employee Miscellaneous Deductions
      7. 114. Investor Deductions
  14. Chapter 8 Traditional Tax Shelters
    1. A Deferral and Leverage
      1. 115. Real Estate
      2. 116. Fees in Public Real Estate Partnerships
      3. 117. Oil and Gas
      4. 118. Equipment Leasing
      5. 119. Single-Premium Life Insurance
      6. 120. Cattle Feeding Programs
      7. 121. Cattle Breeding Programs
      8. 122. Tax Straddles
      9. 123. Art Reproduction
      10. 124. Noncash Gift Shelters
      11. 125. Municipal Bond Swaps
    2. B How to Analyze a Tax Shelter
      1. 126. Getting Out of the Tax Shelter
      2. 127. Master Limited Partnerships
      3. 128. Abusive Shelters
  15. Chapter 9 Super Tax Shelters
    1. A Family Shifts
      1. 129. Unearned Income of Minor Children
      2. 130. Outright Gifts
      3. 131. Clifford Trusts
      4. 132. Interest-Free Loans
      5. 133. The Schnepper Shelter: Gift Leasebacks
      6. 134. The Schnepper Deep Shelter
      7. 135. Family Partnerships
      8. 136. Family Trusts
      9. 137. The Schnepper Malagoli Super Shelter
      10. 138. Employing Members of the Family
      11. 139. Author’s Delight
    2. B Running Your Own Business
      1. 140. Your Home
      2. 141. Your Car
      3. 142. Meals and Entertainment
      4. 143. Travel and Vacation
      5. 144. Gifts
      6. 145. Advertising
      7. 146. Deductible Clothes
      8. 147. Creative Deductions—Busting the IRS
      9. 148. Medical Premiums
      10. 149. Borrowing from Your Company
      11. 150. Miscellaneous Corporate Advantages
  16. Chapter 10 Investment Planning to Save Taxes
    1. 151. Short Sales
    2. 152. Broad-Based Index Options and Regulated Futures Contracts (RFCs)
    3. 153. Wash Sales
    4. 154. Premiums on Taxable and Tax-Exempt Bonds
    5. 155. Original Issue Discount (OID)—Taxable Bonds
    6. 156. Original Issue Discount (OID)—Tax-Exempt Bonds
    7. 157. Market Discount
    8. 158. Municipal Bond Swaps
    9. 159. Employee Options—Nonqualified
    10. 160. Incentive Stock Options
    11. 161. Year-End Stock Sales
    12. 162. Fund Strategies
    13. 163. Dividends
    14. 164. Tax-Exempt Income
    15. 165. Old Prices
    16. 166. Alternative Minimum Tax for Individuals
    17. 167. U.S. Savings Bond Exclusion
    18. 168. Madoff Losses
  17. Chapter 11 Last-Minute Tax Planning
    1. 169. Defer Taxes
    2. 170. Accelerate Expenses
    3. 171. Accelerate Special Deductions
    4. 172. Dependents and Personal Exemptions
    5. 173. Phase-out of Exemptions
    6. 174. Timing Strategies
    7. 175. Retirement Plans
    8. 176. Individual Retirement Plans (IRAs)
    9. 177. H.R. 10 or Keogh Plans
    10. 178. Marital Status
    11. 179. The Goldinger Deferral
  18. Chapter 12 The Economic Growth and Tax Relief Reconciliation Act of 2001
    1. 180. Marginal Rate Reductions
    2. A Individual Income Tax Rate Structure
    3. B Phase-out of Restrictions on Personal Exemptions
    4. C Phase-out of Itemized Deductions
      1. 181. Tax Benefits Relating to Children
    5. A Increase and Expand the Child Tax Credit
    6. B Extension and Expansion of Adoption Tax Benefits
    7. C Child Care Credit
      1. 182. Marriage Penalty Relief Provisions
    8. A Standard Deduction Marriage Penalty Relief
    9. B Expansion of the 15 Percent Rate Bracket for Married Couples Filing Joint Returns
    10. C Marriage Penalty Relief and Simplification Relating to the Earned Income Credit
      1. 183. Education Incentives
    11. A Modifications to Education IRAs
    12. B Private Prepaid Tuition Programs; Exclusion from Gross Income of Education Distributions from Qualified Tuition Programs
    13. C Exclusion for Employer-Provided Educational Assistance
    14. D Modifications to Student Loan Interest Deduction
    15. E 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
    16. F Deduction for Qualified Higher Education Expenses
      1. 184. Pension and Individual Retirement Arrangement Provisions
      2. 185. AMT Relief
      3. 186. Health Insurance for Self-Employed
      4. 187. Income Tax Treatment of Certain Restitution Payments to Holocaust Victims
      5. 188. Estate, Gift, and Generation-Skipping Transfer Tax Provisions
    17. A Phase-out and Repeal of Estate and Generation-Skipping Transfer Taxes; Increase in Gift Tax Unified Credit Effective Exemption
    18. B Expand Estate Tax Rule for Conservation Easements
    19. C Modify Generation-Skipping Transfer Tax Rules
    20. D Availability of Installment Payment Relief
      1. 189. Sunset
  19. Chapter 13 The Job Creation and Worker Assistance Act of 2002
    1. 190. Bonus Depreciation
    2. 191. Net Operating Losses
    3. 192. Classroom Materials
    4. 193. Electric Vehicle Credit
    5. 194. Work Opportunity Tax Credit
    6. 195. Welfare to Work Tax Credit
    7. 196. Archer Medical Savings Account
    8. 197. Liberty Zone Benefits
  20. Chapter 14 The Tax Relief Reconciliation Act of 2003
    1. A Rate Reductions
    2. B The Marriage Penalty
    3. C The Alternative Minimum Tax
    4. D Child Tax Credit
    5. E Dividends/Capital Gains
    6. F Deduct Your SUV—Election to Expense
  21. Chapter 15 Income Averaging and Hurricane Tax Breaks
  22. Chapter 16 2006 Tax Reform
    1. A The Tax Increase Prevention and Reconciliation Act of 2005
    2. B The Pension Protection Act of 2006
    3. C Tax Relief and Health Care Act of 2006
  23. Chapter 17 Tax Reform, 2007–2008
    1. A The Mortgage Forgiveness Debt Relief Act of 2007
    2. B The New Debt Relief Act
    3. C The Economic Stimulus Act of 2008
    4. D The Heroes Earnings Assistance and Relief Act of 2008
    5. E The Housing and Economic Recovery Act of 2008
  24. Chapter 18 2009 Tax Changes
    1. 198. “Making Work Pay” Tax Credit
    2. 199. Reducing the COBRA Bite
    3. 200. First-Time Home Buyer Credit Expanded
    4. 201. American Opportunity Tax Credit
    5. 202. Energy Credits
    6. 203. Plug-in Electric Drive Vehicle Credit
    7. 204. Plug-in Electric Vehicle Credit
    8. 205. Conversion Kits
    9. 206. Treatment of Alternative Motor Vehicle Credit as a Personal Credit Allowed against AMT
    10. 207. AMT Patch
    11. 208. Earned Income Credit
    12. 209. Child Tax Credit
    13. 210. Section 529 Plans
    14. 211. Unemployment Benefits
    15. 212. Qualified Transportation Benefits
    16. 213. Estimated Taxes
    17. 214. Motor Vehicle Sales Tax
    18. 215. Business Depreciation
    19. 216. NOL Carrybacks
  25. Chapter 19 More Tax Changes
    1. A The Hiring Incentives to Restore Employment (HIRE) Act of 2010
    2. B The Patient Protection and Affordable Care Act
    3. C Small Business Jobs Act of 2010
    4. D The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
    5. E American Tax Relief Act of 2012
  26. Chapter 20 How to Avoid/Survive an IRS Audit
  27. Appendix A Cost Recovery/Depreciation
  28. Appendix B Business Use of “Listed Property”
  29. Appendix C Auto Leases
  30. Index