About this time of year, I start remembering that old adage, “Nothing is certain but death and taxes.” At my age I try not to dwell too much on the former and not at all on the latter. Nonetheless, my accountant drags me kicking and screaming into the subject every year starting in late December when he sends out an electronic organizer for me to use in our annual teleconference.
Brenda and I have used the same accountant since we moved to the San Francisco Bay Area in 1976 and I was advised to seek professional help to make sure I got all the deductions I was entitled to after relocating with my job. For the five previous years, I had done my own taxes. After all, I was college-educated and young enough to believe I knew way more than I did about everything, including the tax code. The fact that I had to fork over extra money every year to New York City, New York State and the IRS was evidence enough that I knew far too little.
I came to California believing that our about-to-arrive child would not alter my dog show hobby…tax preparation was not the only subject exposing my naiveté…and was eager to investigate the possibility of deducting some of my dog-related expenses. I still remember Wally’s wry reply, “If for some masochistic reason you want the SPECIAL attention of the IRS, claim a home-based business this year.” It was a somewhat moot point in that it turns out that if you want to claim a business-related deduction you must establish that you intend to turn a profit, something most exhibitors cannot do with a straight face. At least I wasn’t bold enough. I took his advice then and have faithfully followed his direction ever since…with one memorable exception.
In 1986 when the deduction for interest on credit cards was disallowed, Wally advised us to take out a home equity line of credit and pay off our credit cards. When my wife asked him if that would jeopardize our home Wally quipped, “My partner jokes that we are trading bankruptcy for foreclosure.” Seeing the look on my wife’s face, I asked Wally how much money we would save if we did that. Wally turned to his calculator and punched away furiously for a minute and then gleefully told us we could save $800 a year. I replied, “Wally, $800 is not enough money to argue with Brenda all year.”
The decision to put my tax preparation into the hands of Wally was one of the best I have ever made. It’s been a beautiful relationship that has outlasted most in my lifetime. After five years of paying more to the tax man (men) every April, I got a healthy refund in 1976. For the next 22 years, Wally managed to brighten our lives every spring with a check from the IRS. In fact, only once in our entire 37 years have we had to write a check to the IRS. Well, I will have to pay the IRS $56 this year.
I would love to hear from any of you about your doggy-related deductions. Maybe I can get Wally to consider one or two. And that’s today’s Back Story.