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8 q

bigstock-Female_executive_filling_out_tax_forms_while_sitting_at_her_desk.-13012826The perennial nature of tax time does nothing to assuage the overall stress, anxiety, frustration, procrastination and general loathing associated with the chore of preparing your income taxes. For those who prepare their own taxes, the strain can seem particularly acute, yet even ensuring you’ve provided all the necessary documentation to a paid tax preparer can be stressful.

This year, countless Americans will labor over mountains of paperwork, hunt for rogue receipts, itemize ad nauseum, and search for every possible deduction to ensure they don’t overpay even a single dime to Uncle Sam’s outstretched hand. And when it comes to deductions, you might be surprised at the creativity — or plain stupidity — of your fellow taxpayers. So, as the dark cloud of the April 15th deadline looms, I thought I’d attempt a little humor by relaying a few anecdotes of ridiculous and outlandish deductions desperate taxpayers have attempted to declare that shockingly, didn’t pass the proverbial IRS muster.

Fur to Foster Conversation

One businessman thought he could get away with deducting the mink coat in which he draped his wife when entertaining or speaking to clients. His rationale? This cunning guy claimed that his wife’s lavish coat served as a delightful icebreaker and conversation piece. Too bad he got skunked by the IRS.

Drug and Prostitution Expenses 

Shocking though it may be, it turns out that you cannot deduct expenses for careers that are, well, illegal. For those who declare “prostitution” as their profession, the IRS won’t be footing the bill for the fancy lingerie or condoms the job requires. The same is true of marijuana growers and dealers, some of whom have tried writing off the cost of everything from potting soil to the plastic baggies in which they package their “product.”

The Doctor’s System

Sure, doctors require all sorts of high-tech and serious-sounding tools and gadgets to practice medicine, but what exactly is a “time monitoring system”? When one CPA reviewed the taxes of a physician who was being audited came across this rather large deduction, he had the same question. When he asked the doc to explain this mysterious “time monitoring system,” he was treated to a display of the doctor’s blinged out Rolex.

Watch for the Fallout 

During the height of the Cold War, one patriot followed the cue of other frightened Americans and constructed a nuclear fallout shelter on his property. Granted, those things aren’t cheap, but none of his other fallout-fearing peers tried to take it as a tax deduction. So just how did he list his new shelter? As “preventative medicine,” of course!

All for Education

One creative Spanish teacher ordered the Spanish-language subscription from his cable provider and, of course, purchased a new television on which to watch his favorite Spanish-language shows. Since he was an educator — and an educator specializing in Spanish, no less — he thought it only appropriate that the IRS reimburse him for these “teaching expenses.” How do you say “Nice try” in Spanish?

Up in Smoke 

This one has to be my personal favorite. A failing and frustrated furniture store owner decided the best way to get out of business was to hire someone to burn it down. And as it turns out, this man was very diligent when listing the expenses he incurred in this calamity. Not only did he accurately report the loss of his building, as well as his payout of $500,000 in insurance money, he also listed a $10,000 deduction as a “consulting fee.” As it turns out, no matter how much you consult with an arsonist, the whole thing is illegal. Imagine that. Both business owner and arsonist/consultant ended up in prison.

8 q

I’m constantly getting questions about no exam life insurance. Let’s face it, no one wakes up in the morning saying, “if only I could have an insurance physical today.”  Or maybe there’s something in their medical records that makes them nervous.

These same people might get on the internet and find a site, see an ad for no exam insurance. They get a quote, apply, and never look back. AND WASTE A LOT OF MONEY.

A client was pimpin’ me the other day about this very thing, telling me she could do better with a no exam policy and not have to hassle with all that needles and samples nonsense. I was able to guide her in the right direction, take the exam, and get underwritten.

This morning, I came across an ad for no exam life insurance as I was doing my morning reading. Albeit from one of the best carriers out there. In the name of confirming what I had sold her, I entered the client’s information and out came this quote:

NYLNoExamPremium

Doesn’t seem too crazy now does it? It does when you look at what the client walked away with after full underwriting. The quote above is for $100,000 in coverage that lasts to age 80 for $48.75 per month. What we placed for this client was $500,000 in coverage for 10 years for $18.60 per month.

The reality is, if the client had jumped the gun and gone with the no exam policy, she would have been inadequately covered. What she really needed was a $500,000 for 10 years to cover the needs of her family should her income be lost.

Summary: she would have ended up with too little insurance for too much premium. Who wants that? Read carefully and do your research. There’s often more to it than meets the eye.

Bye for now.

M

8 q

“John Fenton left us much too early at the age of 56 on November 6, 2012. John leaves a loving family of four adult children; his wife JoAnne and countless number of friends and acquaintances to grieve his sad passing as a result of complications of medical issues. John, a hard-working dedicated father and husband, lived with great pain over the past couple of years. He never complained! His most recent surgery of approximately one month ago required John to rest. This was not John. He loved his work and was dedicated to his family and could not just sit by and recuperate as was necessary. It took great effort, despite his pain, for John to rise every morning at 3:30 am to travel from Acton to his job in Hermosa Beach while being limited with his mobility that required use of crutches to assist his walking. John knew that his most recent surgery carried great risks to correct his prior surgery of ankle reconstruction. Unfortunately, John was afflicted with serious blood-clotting issues that eventually led to his untimely death. John was a major provider for his family which the loss of his income is devastating to the family. There are on-going medical expenses; family expenses and funeral expenses that, unfortunately, are not covered by insurance as John was not able to qualify for life insurance due to his age and medical condition. There have been many loving messages and condolences expressed in a very short period of time since his passing with the request of “what can we do to help?” Contributing whatever you can afford will provide the family with great assistance at this time. Of course, the family would prefer that this request would never have been necessary. They offer their loving and God-felt wishes for your love and support.”

If you would like to support the Fenton Family, you can do so at http://www.giveforward.com/fentonfamilymemorialfund

We are.

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