Tax deductible gifts are the order of the day, to save taxes while holidaying. People who find tax deductible gifts as a mundane option, need to think again as the US government has introduced lots of attractive gifts in the tax deductible category as long as they are used for the right purposes.
Some of the technological gadgets that are classified as tax deductible are computers, tablets, smart phones, kindles, cameras, video cameras and modern GPS’s. The pre-requisite for making these gadgets tax deductible is that these have to be used for official purposes only. Self educational gifts are also tax deductible as this is pursued to develop one’s current skill sets. Some of the educational gifts that can be claimed for deductions are books, subscription paid for educational magazines, tuition fees paid for a course etc.
People who work from home are not left behind. There is something in this scheme for these people also. A person can gift himself a new office or some furniture and claim the same for tax deductions as these are used for official purposes; only in this case, the office is at one’s home itself. Furniture especially is a very good example of a tax deductible gift and the tax payer has the added advantage of using this for domestic purposes also.
A tax payer can gift himself a brand new car and claim tax deductions for the same as long as it is used for official purposes. There is no other pleasure than splurging in a new car and getting a tax benefit for the same. A full time employee can also claim for these deductions as long as the employer does not already reimburse this. Cars are used as tax deductible gifts mostly by contract employees, freelancers and entrepreneurs who do not have direct employers to reimburse these.
The tax payer should always note that the gifts can be tax deductible only if it is used for purely official purposes and if the IRS recognizes these gifts only if it is absolutely necessary for the business needs. Care should be taken that a gift used for personal reasons should never be claimed for tax deductions. This is a serious offence and there are high chances that the tax payer might get enquiries for audit by the IRS and this causes loss of reputation for the individual.
However the tax payer can prudently use some of the gifts for personal as well as official purposes and still claim tax deductions. Computers, for example, can be used for personal purposes as well but the individual should exercise control to claim deductions only for the official expenses part. The tax payer should keep a clean record of all receipts in order to claim tax deductions.
With these effective tax savings gifts, one can not only enjoy holidays but also have enough money to save for a rainy day. One must smartly use the tax laws to save money, the ethical way.