Paul Lewing on fri 1 sep 00
Mudnjoy@AOL.COM wrote:
> I used to ask for tools as gifts but soon realized I was loosing a tax
> deduction for tools and equipment. I've found (tax wise) I'm better off
> paying for my own tools.
> Joy In Tucson
Joy, I've never quite gotten the rationale for this opinion.
Let's say, for the sake of simple math, that you make $200 in a year and
you want a $100 tool. If you buy it yourself, you have a $100 deduction
from your $200 of income, and you pay tax on the other $100- let's say
28%. Which leaves you with a net of $72.
If, on the other hand, someone gives you the $100 tool and you end up
paying 28% tax on the whole $200, it leaves you a net of $144. Yes,
you've paid twice as much in tax, but you've also netted twice as much.
Am I missing something here? Isn't free better than deductible? Isn't
higher after-tax income better than lower taxes?
Paul Lewing, Seattle
Mudnjoy@AOL.COM on fri 1 sep 00
In a message dated 8/31/00 6:53:01 AM US Mountain Standard Time,
gilois@BELLATLANTIC.NET writes:
>
> >Mel wrote:
> >
> >> ask for tools for birthday, holidays....never get clothes.
> >> get tools.
> >
I used to ask for tools as gifts but soon realized I was loosing a tax
deduction for tools and equipment. I've found (tax wise) I'm better off
paying for my own tools.
Joy In Tucson
Ray Aldridge on sat 2 sep 00
At 08:51 PM 9/1/00 +0000, you wrote:
>Mudnjoy@AOL.COM wrote:
>
> > I used to ask for tools as gifts but soon realized I was loosing a tax
> > deduction for tools and equipment. I've found (tax wise) I'm better off
> > paying for my own tools.
> > Joy In Tucson
>
>Joy, I've never quite gotten the rationale for this opinion.
>Let's say, for the sake of simple math, that you make $200 in a year and
>you want a $100 tool. If you buy it yourself, you have a $100 deduction
>from your $200 of income, and you pay tax on the other $100- let's say
>28%. Which leaves you with a net of $72.
>If, on the other hand, someone gives you the $100 tool and you end up
>paying 28% tax on the whole $200, it leaves you a net of $144. Yes,
>you've paid twice as much in tax, but you've also netted twice as much.
>Am I missing something here? Isn't free better than deductible?
The only thing you might be missing is if the gift usually comes from a
spouse and you file jointly. Then the arithmetic you use above has the
$100 tool coming out of the $144 after-tax income. So you're down to $44
by taking the gift from your spouse. Or so it seems to me, but I might be
confused.
And I have to admit, no one loves me enough to give me expensive tools but
my wife and children.
Ray
http://goodpots.com/
Lee Love on sun 3 sep 00
----- Original Message -----
From: Ray Aldridge
> The only thing you might be missing is if the gift usually comes from a
> spouse and you file jointly.
If it is a gift from a spouse, you can safely say that you bought
it, I think.
--
Lee Love
Mashiko JAPAN Ikiru@kami.com
Help E.T. Phone Earth: http://setiathome.ssl.berkeley.edu/
Ray Aldridge on sun 3 sep 00
At 12:32 PM 9/3/00 +0900, you wrote:
>----- Original Message -----
>From: Ray Aldridge
>
>
> > The only thing you might be missing is if the gift usually comes from a
> > spouse and you file jointly.
>
> If it is a gift from a spouse, you can safely say that you bought
>it, I think.
Yes. That's the point. You _did_ buy it, out of household income, so
might as well take the deduction, rather than regarding it as a gift.
Ray
http://goodpots.com/
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