IMPROVE YOUR HOME AND LOWER YOUR TAX BILL
Several ways exist to deduct home improvements, and one of the best is by having a home office. The IRS allows you take certain deductions, or percentages of deductions, based upon having a home office. For example, if your home office takes up 5 percent of your home’s square footage, you can deduct 5 percent of most “whole house” improvements like painting and renovations.
Even better, if your clients come to your home and the presentation of the house is important to your business image, the IRS even allows you to deduct costs like landscaping. Deducting paying someone to mow your lawn is a pretty sweet tax loophole.
QUALIFY BY HAVING A KIDNAPPED CHILD
Although undeniably the most bizarre loophole on the list and not what anyone would wish for, having a child who was kidnapped qualifies. Kidnapped children count for purposes of tax deductions and as qualifying family members for various deductions and credits. To qualify, law enforcement must believe that the child was kidnapped by someone who isn’t a member of the family.
THE 529 COLLEGE DOUBLE-DIP
Paying for college can be expensive, but some relief exists in the American opportunity tax credit and the lifetime learning credit. You can even deduct tuition and eventually student loan interest. And one tiny loophole that helps people in some states is that you might get a state income tax deduction for money invested in a 529 college savings account.
Also, all of the growth and earnings within the account are tax-free as long as you use them to pay for education. You can get a state tax deduction on the contribution and free capital gains but then still deduct the full amount on your Federal income taxes — or be eligible for the full credit amount when you withdraw and spend the funds.
