April 15 is unaffectionately dubbed Tax Day by most Americans, because it is the deadline by which tax information for the previous calendar year must be filed. Yet creative types — or should I say procreative types? — are more apt to focus on March 31. That is the last date on which a couple can, er… turn a concept into a conception, give the lady a full nine month gestation, and be holding a bouncing little bundle of joyous tax deduction born before midnight of New Years’ Eve. Even a kid born at 11:59 p.m. of December 31 entitles you to a tax break worth more than a thousand dollars, ostensibly to cover all the baby food and diapers you bought the tyke this year.
If it seems absurd that the IRS is playing Cupid as well as Mammon, influencing the bedroom as well as the boardroom, that’s because it is absurd. But absurdity has never dissuaded politicians.
Trying to live your life within the parameters deemed advantageous by the Tax Man can be quite an adventure. A few years ago I had the idea of trying to pay down my mortgage whenever I made a chunk of money. I called my accountant and asked him what he thought.
“Terrible idea,” he said. “Your mortgage interest is a tax deduction. You pay the principal down, suddenly your entire net worth is in your walls and the IRS levy is too steep for you to handle.”
“Well, what happens if I just can’t afford the tax bill?” I asked.
“Then they take your house.”
It turns out that your home is always mortgaged, anyway. To Uncle Sam and his little nephews at Treasury playing with their piggy banks.
After that, I got the notion that I should be more conscientious about committing to pay tuition. My children are in private schools and every year I appear before the scholarship committees to have my finances dissected with a dull scalpel. (Yes, I have cried a time or two.) So I figured that perhaps I should just undertake to pay full price of ten thousand after-tax dollars a kid and work sixteen hours a day to pay my way.
“Terrible idea,” my accountant said. “Tuition is not tax-deductible, because of Constitutional issues. Take whatever they give you in abatements. Later, if you made more money and you want to be a sport and help the school, you give it as a donation. That is tax-deductible.”
Speaking of philanthropy, my late mother’s father had a beautiful practice of slipping envelopes of cash under the doors of impoverished families. This is in keeping with the Jewish tradition of “hidden giving,” where the recipient is not embarrassed by having to accept a handout from someone he knows. It occurred to me that perhaps this kind of kindness could be brought back into vogue.
“Terrible idea,” says my accountant. “With taxes so high, only the most generous people give charity. They will at least want the break of not being taxed on the dollar they are giving to the needy. You must have a foundation that people can write a deductible check to, and only then can you deliver the aid — in the form of a check from the foundation.”
Then I got a super break, or so I thought. A friend of mine has a real-estate management company that occupies a large suite of offices. He generously offered me a nice enclosed office space, where I could set up a desk, a computer and a small library. Free of charge; it was an extra room that was unused, and he was paying the full rent in any case.
“Terrible idea,” my accountant rasped. “You have a perfect setup in your home office. That enables you to deduct a portion of your light bill, your gas bill, your phone bill, plus all the air conditioning in the entire house during the day when no one else is in the house.”
So there you have it. People often write me to wonder why such a good-looking and clever man is not on the TV political chat shows more often. Now the answer can finally be revealed.
It is the fault of the IRS: They are holding me in house arrest.