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J.K. Lasser's 1001 Deductions and Tax Breaks 2013: Your Complete Guide to Everything Deductible by Barbara Weltman

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APPENDIX C

Checklist of Nondeductible Items

Unfortunately, not everything you spend your money on gives rise to a tax deduction. Most of your personal expenses, such as food, clothing, and recreation, are nondeductible items. The tax law also specifically bans certain write-offs. Of course, in some cases, while a deduction may be banned as a general rule, there may be circumstances under which it becomes deductible (so check throughout the book for exceptions to the general rule).

The IRS has identified a number of scams (the IRS calls them the “Dirty Dozen”) in which sharp promoters incorrectly advise taxpayers to claim certain types of write-offs. Here are some types of situations that the IRS has over the years cautioned taxpayers against:

  • Identity theft. Thieves are looking for ways to use a legitimate taxpayer's identity and personal information to file a tax return and claim a fraudulent refund. Avoid problems with obtaining your legitimate refund by safeguarding your tax information; contact the IRS Identity Protection Specialized Unit.
  • Preparer return fraud. Dishonest preparers, often promising refunds too good to be true, can leave taxpayers owing taxes and penalties for underpayments. Taxpayers remain liable for taxes owed on their returns.
  • Hiding income offshore. The IRS is working with some offshore banks to learn the identity of depositors who fail to report their offshore income on their U.S. returns. The IRS continues to develop investigation procedures to catch ...

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