February 01, 2013
Robert Spielman, Tax & Business Services Partner, Featured in The Fiscal Times Article "13 Tax Breaks You've Never Heard Of"
By Steve Yoder
When it comes to saving, most of us consider taxes an afterthought. But John Vento, a CPA and author of the upcoming book Financial Independence (Getting to Point X), says that with taxes eating up 35 percent or more of many people’s paychecks, planning for them can be the most important step in building wealth. “The government requires you to pay no more than you owe,” he says, “but the majority of people pay much more simply because they don’t take time to understand tax planning.”
Part of a good tax strategy is finding deductions in the hidden corners of the cluttered labyrinth that is the U.S. tax code. There are about 200 such breaks in the current system according to data compiled by researchers Leonard Burman and Marvin Phaup. But many of them go unclaimed—the Government Accountability Office has estimated that as many as 2 million taxpayers overpay by not itemizing their deductions. With tax rules even more complex today, that number has likely only grown.
Many of the breaks target tiny constituencies and specific companies. There’s the deduction for foreign bettors on money they make gambling over the Internet on U.S. horse and dog races. Another benefits companies that film movies in the U.S. And you can write off the cost of shipping your pet when you move for work as part of your other deductible moving expenses.
12. Work overseas in a low-tax country. If you work overseas, the first $95,100 of income are excluded from U.S. taxes so that you avoid paying twice—once in-country and once in the U.S. But that exclusion recognizes no distinction between low- and high-tax countries, notes Bob Spielman, a partner at accounting firm Marcum LLP. So if you’re earning money in places like Monaco, Kuwait, or Bermuda, where there’s no income tax, your first 95 grand are tax free.